Your rental bank reconciliation does not balance: how to find the difference
The size of the difference points to the cause. A difference that equals one transaction is a missing or duplicated entry. A difference of exactly twice a transaction is a deposit entered as a payment, or the reverse. A difference divisible by nine is often two digits swapped. Work through those three before you hunt line by line.
Check the basics before you hunt
An unbalanced reconciliation often comes from a setup mistake rather than a hidden transaction. Check these first, because each takes one minute.
- Are you looking at the right statement and the right date? The statement ending balance must be the one for the last day of the month you are reconciling.
- Is the opening balance in your books the same as last month's closing balance? If someone edited a past month, the opening figure moved.
- Is it the right account? An owner with several properties often reconciles the fourplex against the duplex's statement.
- Did every transaction on the statement post to this account and not to a different bank account in your books?
A reconciliation is the check that your cash records agree with the bank. The IRS expects business records that support income and expenses (Publication 583), and a monthly reconciliation is what shows the records are complete.
Let the size of the difference guide you
| What the difference looks like | Likely cause | What to do |
|---|---|---|
| Equals one transaction exactly | A transaction is in the bank but not your books, or the reverse | Search the statement and the books for that exact amount |
| Equals twice a transaction | A deposit entered as a payment, or a payment as a deposit | Search for half the difference and check its direction |
| Divisible by 9 | Two digits swapped, such as 540 entered as 450 | Look for amounts with digits that could be swapped |
| A round number like 100 or 1,000 | A typo of one digit, or a transaction entered once instead of twice | Look for amounts that differ by that digit |
| Small, a few cents | Rounding, a bank fee or interest | Check the fee and interest lines at the end of the statement |
| Large and unexplained | Several errors that partly cancel | Reconcile in halves, first the first half of the month, then the second |
Example a made-up fourplex reconciles with the books $1,100 higher than the bank. The owner searches the statement for $550 because the difference is twice that figure, and finds a $550 refund of a tenant's deposit entered in the books as a deposit received instead of a payment out. Fixing the one entry moves the books down by $1,100 ($550 removed from receipts and $550 added to payments), and the two sides agree.
Separate timing items from real errors
A reconciliation ends with a short list of items that are in your books but not yet on the bank statement, such as a deposit made on the last day or a check not yet cashed. These are timing items. They are fine if they clear in the next statement. They are errors if they never clear. Keep the list and check it next month: a check outstanding for months is a payment someone never cashed, and a deposit that never shows up is a deposit that was never made.
Fix it in the right place
- Correct the original entry rather than adding an adjusting entry to hide the gap.
- If a past, closed month needs a change, reopen it deliberately and note why.
- Never force the balance by entering a plug figure. A plug hides the error and moves it to a month when you cannot trace it.
- Write down what was wrong. Repeated causes (a vendor entered twice, a refund coded as income) are a rule to add to your routine.
How DoorKeeping handles it
DoorKeeping connects to your bank feed and matches each deposit to a tenant by the memo and exact amount, so most reconciliation work is done as money arrives. The month-end close lists what is still unmatched, and each property's books are kept apart so a transaction cannot land in the wrong building. You can ask Claude or ChatGPT "what is unmatched on the Elm Street account this month?" and fix each item before you lock the month. Rent and payments stay in your own bank accounts. DoorKeeping never holds your money and sends a payment only when you approve it. It costs $2 per unit a month, every feature included, no setup and no minimum.
Sources
- IRS, Publication 583, Starting a Business and Keeping Records, read Oct 30, 2026
Questions
- Why is my bank reconciliation off by a small amount?
- Often a bank fee, interest or a rounding difference that appears at the end of the statement and is not yet in your books.
- What does it mean when the difference is divisible by 9?
- It often points to two digits swapped in an entry, such as 540 typed as 450. The difference between those is 90, which is divisible by 9.
- Should I add a plug entry to make it balance?
- No. A plug hides the error. Find the cause and correct the original entry.