Reconcile your bank Account

You must keep track of your bank account. If you do not have some sort of system to organise all the bills that you receive, then this process becomes more complex and risky than it needs to be!

Collect all of your bank statements together. (Ask your bank for a list of the regular outgoings you have, just to check that you have a complete list.)

Then go through all your bank statements for at least the last six months.

Write down every direct debit, standing order or regular withdrawal. You should check that these payments should have been paid and that the amounts are correct.

You should reconcile the bank account each month. That means that you check for the following:
1. All the money that you expect to have paid in to the account has arrived.
2. All the direct debits and standing orders that you expect to have been taken from your account have been paid.
3. All cash machine withdrawals have been taken from your account.
4. All the cheques that you have written have also been taken from your account
5. If you have been notified of charges that are due to be taken from your account then you should know the date when they will be taken. Check if they have gone.

You now know the following about your bank account.

one The current balance in the bank account.
two All expected receipts that have not yet been paid to you.
three All expected payments and charges that have not yet been taken from the account.

Remember to include all the bills that you received last month and need to be paid during the next month.

Also remember that it may take several days for money paid into your account to be cleared. You may still have to pay penalties if you try to take money out and you don't have sufficient cleared funds. If in doubt check with the bank!

If your bank balance is greater than all of the payments, bills and charges that are due to be taken from the account during the following month, then all should be OK. There may still be a problem if an expected payment is not cleared when you need the money.

It is up to you to monitor this. The banking system is such that it effectively fines you £30 or more whenever you make a mistake or someone else lets you down!

If your bank balance is overdrawn or there is not enough to pay all the outstanding payments and charges, then you may have a problem. It is up to you to check, on a daily basis if necessary, that there are sufficient cleared funds to cover any debits going out of your account that night.
If you are not sure then check with the bank. It might take you 15 minutes to check your bank balances, but if it saves you £30 then that is the equivalent of earning £120 per hour!!

One tip that may be useful is that you can normally pay cash into your account at your branch to cover debits going out that night. If you are paying cash into any other branch then check if the money will be in your account in time to pay the bills.

Do not just assume that any payments going in to the account will clear in time to cover outgoings you know are due to be paid.

You need to sure that outgoing bills will not be bounced and that charges will not be put on your account. The only immediate options are to either pay sufficient cash into your branch or contact the bank to ask for a short term overdraft.

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