Bank Reconciliation Statement (BRS)
Manual and auto-reconciliation of Sunrise Retail's SBI Madhapur account for April 2025 — cheques, bank charges, FD interest
Module 19 of 31 — Tally Prime. Bank Reconciliation Statement — matching Tally's bank ledger with the actual bank statement, April 2025. Duration: 45 min.
Prerequisites: Module 07 — Payment and Receipt Vouchers
Learning Objectives
- Understand why BRS is necessary and what causes differences
- Perform manual BRS in Tally Prime — entering Bank Dates
- Identify and resolve common reconciliation differences: bank charges, FD interest, uncleared cheques
- Import a bank statement CSV for auto-reconciliation
- Produce and print the BRS report for Sunrise Retail April 2025
Why Bank Reconciliation?
Tally records every payment and receipt when you enter the voucher. The bank processes transactions on their own timeline. These two records diverge for predictable reasons:
| Difference Type | What Happened | Direction |
|---|---|---|
| Cheque issued, not yet presented | You debited Tally on Apr 8; bank pays on Apr 12 | Tally balance < Bank balance |
| Cheque deposited, not yet cleared | You credited Tally on Apr 25; bank credits on Apr 27 | Tally balance > Bank balance |
| Bank charges | Bank deducts ₹850 on Apr 30; you haven't entered in Tally | Tally balance > Bank balance |
| FD / savings interest | Bank credits ₹3,200 on Apr 30; not yet in Tally | Tally balance < Bank balance |
| ECS / NEFT received | Customer paid direct to bank; data entry pending | Tally balance < Bank balance |
| Direct debit / auto-payment | Bank deducted insurance premium; not in Tally | Tally balance > Bank balance |
Goal of BRS: After identifying and resolving all differences, Tally's bank ledger and the bank statement must show the same balance.
Sunrise Retail — April 2025 BRS Setup
Bank account: SBI Current Account — Madhapur Branch, Hyderabad Tally ledger: SBI Madhapur Current A/c (under Bank Accounts) Reconciliation period: 01-Apr-2025 to 30-Apr-2025
Step 1: Tally's April Transactions (What We Entered)
| Date | Voucher | Particulars | Dr (Payment) | Cr (Receipt) |
|---|---|---|---|---|
| Apr 1 | Opening | Balance b/f | ₹50,00,000 | |
| Apr 1 | F5 Pay | Petty Cash withdrawal (ATM) | ₹10,000 | |
| Apr 8 | F5 Pay | Rent payment — Cheque No. 000123 (Landlord Krishna Properties) | ₹35,400 | |
| Apr 20 | F5 Pay | Petty Cash replenishment — NEFT | ₹8,000 | |
| Apr 25 | F6 Rec | Cash sales deposited | ₹45,000 | |
| Apr 30 | F5 Pay | Salary — NEFT batch | ₹1,50,000 | |
| Closing | Tally Balance | ₹48,41,600 |
Step 2: SBI Bank Statement (What the Bank Sees)
| Date | Description | Dr (Withdrawal) | Cr (Deposit) | Balance |
|---|---|---|---|---|
| Apr 1 | Opening Balance | ₹50,00,000 | ||
| Apr 1 | ATM WDL — Petty Cash | ₹10,000 | ₹49,90,000 | |
| Apr 12 | CHQ 000123 — KRISHNA PROP | ₹35,400 | ₹49,54,600 | |
| Apr 21 | NEFT — Petty Cash Replenishment | ₹8,000 | ₹49,46,600 | |
| Apr 25 | CASH DEP — Sales | ₹45,000 | ₹49,91,600 | |
| Apr 29 | NEFT — SALARY BATCH APR | ₹1,50,000 | ₹48,41,600 | |
| Apr 30 | SBI SERVICE CHARGE | ₹850 | ₹48,40,750 | |
| Apr 30 | FD INT CREDIT | ₹3,200 | ₹48,43,950 | |
| Apr 30 | Bank Closing Balance | ₹48,43,950 |
Step 3: Identifying Differences
Comparison:
Why? Two transactions in the bank statement are NOT yet in Tally:
| Item | Bank Statement | Tally | Action Required |
|---|---|---|---|
| SBI service charge Apr 30 | Dr ₹850 | Missing | Enter Payment voucher in Tally |
| FD interest credit Apr 30 | Cr ₹3,200 | Missing | Enter Receipt/Journal in Tally |
Timing differences (already reconciled by Bank Date):
- Cheque 000123: Tally Apr 8 → Bank Apr 12 → enter Bank Date Apr 12 in BRS
- Petty cash NEFT: Tally Apr 20 → Bank Apr 21 → enter Bank Date Apr 21
- Salary NEFT: Tally Apr 30 → Bank Apr 29 → enter Bank Date Apr 29 (bank processed a day early)
Opening Bank Reconciliation in Tally
Tally BRS Screen
Step 4: Enter Bank Dates for Timing Differences
Click each row and enter the date it actually appeared in the bank statement:
After entering Bank Dates, the timing differences are reconciled. Only the missing entries remain.
Step 5: Enter Missing Entries in Tally
Bank service charge (₹850):
FD interest credited by bank (₹3,200):
Now go back to BRS, enter Bank Date 30-Apr-2025 for both new entries.
After Reconciliation — BRS Report
Bank Statement Import (Auto-Reconciliation)
For high-volume months, Tally Prime can auto-reconcile by importing the bank statement:
SBI statement CSV format:
Import saves 30–60 minutes of manual Bank Date entry for busy current accounts.
Common Adjustment Types — Quick Reference
| Situation | Entry in Tally | Ledger Dr | Ledger Cr |
|---|---|---|---|
| Bank service charge | F5 Payment | Bank Charges (Ind Exp) | SBI Bank |
| Bank interest (savings/FD) | F6 Receipt | SBI Bank | Interest Received (Ind Inc) |
| Direct debit (insurance, EMI) | F5 Payment | Insurance/Loan Repayment | SBI Bank |
| NEFT received direct | F6 Receipt | SBI Bank | Party / Sales |
| Cheque bounced (inward) | F5 Payment | Customer Ledger | SBI Bank |
| Cheque bounced (outward) | F6 Receipt | SBI Bank | Supplier Ledger |
Reconciliation in Tally — Alt+R Walkthrough
The detailed steps above show the conceptual flow. Once you've done it twice, the actual reconciliation is a 5-keystroke sequence per voucher using Alt+R. Here's the practical walkthrough — the same Sunrise Retail April BRS, compressed to what your hands actually do.
Side-by-Side: Bank Statement vs Cash Book
Real-world BRS work starts with a side-by-side printout. Read across each row — matched entries reconcile themselves, mismatches signal the action:
What this layout tells you in one glance:
- Cheque number 000123 — same cheque on both sides, different dates. This is a timing difference, no new entry needed; just enter Bank Date Apr 12 in BRS.
- Apr 21 vs Apr 20 NEFT — one-day NEFT processing lag. Bank Date Apr 21.
- Apr 29 vs Apr 30 Salary — bank processed a day EARLIER than Tally booked (rare but happens with batch NEFT). Bank Date Apr 29.
- SBI Service Charge ₹850 — bank-side only. Missing in Tally → post F5 Payment entry.
- FD Interest ₹3,200 — bank-side only. Missing in Tally → post F6 Receipt entry.
Alt+R — Step-by-Step Reconciliation Flow
After the worksheet analysis is done, the actual reconciliation in Tally is four keystrokes:
Open the bank ledger in Reconciliation mode
Tally now shows every unreconciled voucher with an empty "Bank Date" column on the right.
Enter Bank Date for each pending voucher
For each row in the BRS screen, type the date the bank actually processed it:
After each Bank Date entry, that row turns green (or moves to the reconciled list — depends on Tally Prime build).
Save the reconciliation
Tally writes the Bank Dates against each voucher and locks them in. The BRS report can now be generated.
Check the result
For Sunrise Retail's April: after the two missing entries (₹850, ₹3,200) and 7 Bank Dates, the BRS balance becomes ₹48,43,950 = bank statement balance. ✓
Common Cheque-Number Mismatch Scenarios
The cheque number is the strongest matching key in any reconciliation — match by it first, then verify amount, then check date. Patterns that confuse trainees:
| Scenario | Tally Side | Bank Side | What's Happening | Action |
|---|---|---|---|---|
| Number matches, amount matches, dates differ | Chq 000123 ₹35,400 on Apr 8 | Chq 000123 ₹35,400 on Apr 12 | Standard cheque clearing lag (3–5 days) | Bank Date Apr 12 |
| Number matches, amounts differ | Chq 000456 ₹50,000 | Chq 000456 ₹45,000 | Bank cleared partially OR a typing error in Tally | Investigate — likely Tally entry wrong; alter voucher |
| Number missing in Tally | (no entry) | Chq 000789 ₹12,000 | Cheque issued but never booked in Tally | Post F5 Payment with correct cheque number, then reconcile |
| Number issued in Tally, not yet on bank statement | Chq 000601 ₹25,000 on Apr 28 | (nothing yet) | Cheque issued late in month, not presented by month-end | Leave unreconciled — will reconcile next month when it clears |
| Bank shows the cheque, Tally shows it under a different number | Chq 000700 ₹8,500 | Chq 000777 ₹8,500 | Cheque written and reissued OR Tally typo | Alter the Tally voucher to the correct number; reconcile |
| Same cheque appears TWICE in Tally | Chq 000123 ₹35,400 on Apr 8 AND Chq 000123 ₹35,400 on Apr 9 | Chq 000123 ₹35,400 once on Apr 12 | Accidental duplicate entry in Tally | Delete the duplicate voucher (Alt+D); reconcile the remaining one |
| Cheque cleared in bank, then bounced and re-debited | Chq 000300 ₹40,000 Cr (receipt) | Cr Apr 10 then Dr Apr 14 (bounce) | Customer's cheque returned — must reverse in Tally | Post F5 Payment for ₹40,000 + bounce charges; reconcile both events |
The single biggest BRS mistake: leaving an unreconciled cheque-in-transit at month-end "for later". If you don't carry it forward as opening unreconciled, next month's BRS won't balance even if everything is correct. Always show cheques-in-transit explicitly in the closing BRS, with cheque number and amount.
Practice Exercise
Exercise: Sunrise Retail's Tally shows May 1 bank balance of ₹48,43,950. The SBI May statement shows ₹48,74,950 as opening balance. Difference is ₹31,000 (bank is higher). Investigate and fix.
Show Solution
Difference: ₹48,74,950 − ₹48,43,950 = ₹31,000 credit in bank not in Tally.
Investigation steps:
- Print/view Tally bank ledger for April — look for any missing receipt entries
- Compare line by line with the bank statement
- Look for ₹31,000 deposit (or multiple smaller deposits summing to ₹31,000) in April bank statement not in Tally
Common cause: CloudStore Online payment of ₹19,470 (Module 12 exercise return) + ₹11,530 another receipt = ₹31,000 collected via NEFT but not entered in Tally.
Fix (example — NEFT receipt from customer):
After entry, go to BRS → enter Bank Date → difference becomes zero.
Key Terms
| Term | Meaning |
|---|---|
| Bank Reconciliation | Process of matching Tally bank ledger with actual bank statement |
| Bank Date | The date a transaction actually cleared in the bank (may differ from Tally entry date) |
| Unreconciled Balance | Difference between Tally balance and bank statement balance |
| Cheque in Transit | Cheque issued but not yet presented — timing difference only |
| Bank Charges | Bank fees deducted directly — must be entered in Tally separately |
| Statement Import | Upload bank CSV to Tally for auto-matching — reduces manual entry |
Module Summary
- BRS matches Tally's bank ledger with the actual bank statement — minimum monthly
- Common differences: timing (cheques in transit), bank charges, FD interest, ECS/NEFT not entered
- Sunrise Retail April: two missing entries — SBI service charge ₹850 (enter F5) and FD interest ₹3,200 (enter F6)
- After both entries, Tally balance = Bank balance = ₹48,43,950
- Manual BRS:
Reports → Banking → Bank Reconciliation→ enter Bank Date per voucher - Auto-BRS: import bank statement CSV → Tally auto-matches and flags unreconciled items
Checklist before moving on:
- BRS screen opened for SBI Madhapur Current A/c — April period
- Bank Dates entered for all 5 vouchers (Apr 1, Apr 12, Apr 21, Apr 25, Apr 29)
- F5 Payment entered for SBI service charge ₹850
- F6 Receipt entered for FD interest ₹3,200
- BRS report shows NIL difference (₹48,43,950 = ₹48,43,950)
- BRS printed / saved for April records
Quick Quiz
1. A cheque for rent (₹35,400) was entered in Tally on April 8. The bank cleared it on April 12. How is this handled in BRS?
- a) Enter the transaction again in Tally dated April 12
- b) Enter Bank Date April 12 for this voucher in the BRS screen
- c) Delete the April 8 entry and re-enter on April 12
- d) Post-dated — move to next month
Answer
b) Enter Bank Date April 12 in the BRS screen — this reconciles the timing difference. You never delete or duplicate the Tally entry. The Bank Date field records when the bank processed it, while the voucher date remains April 8.
2. SBI service charges of ₹850 appear on the bank statement but NOT in Tally. The correct action is:
- a) Ignore it — it's a small amount
- b) Enter a Payment voucher: Dr Bank Charges, Cr SBI Madhapur A/c
- c) Enter a Receipt voucher
- d) Mark it reconciled without a Tally entry
Answer
b) Enter a Payment voucher — bank charges reduce the bank balance. Dr: Bank Charges (Indirect Expenses), Cr: SBI Madhapur A/c. Then enter Bank Date April 30 for this new voucher in the BRS screen.
3. After entering the bank charges (₹850) and FD interest (₹3,200) in Tally, the reconciled balance is:
- a) ₹48,41,600 (original Tally balance)
- b) ₹48,43,950 (bank statement balance)
- c) ₹48,40,750 (after charges only)
- d) ₹48,44,800
Answer
b) ₹48,43,950 — after entering both missing items (−₹850 + ₹3,200 = net +₹2,350 change to Tally balance), Tally balance = ₹48,41,600 + ₹2,350 = ₹48,43,950, which matches the bank statement exactly.
4. Which common BRS difference is a timing difference (no new entry needed in Tally)?
- a) Bank service charge
- b) FD interest credit
- c) Cheque issued but not yet presented to bank
- d) ECS premium deducted by bank
Answer
c) Cheque issued but not yet presented — this is a timing difference only. Tally recorded it when the cheque was issued; the bank hasn't processed it yet. No new entry needed — just enter the Bank Date when it clears. Options a, b, d all require new Tally entries because they are transactions not yet recorded in the books.