Bank reconciliation software helps to automate the financial close process and replaces it with a centralized online system. It replaces the possibility of human error with accurate and reliable software, helping to save time and increase your productivity. We have compiled a list of the five best bank reconciliation software for small businesses to assist you with finding the best solution for your business.
Best Bank Reconciliation Software
- QuickBooks Online: Best overall bank reconciliation software
- NCH Express Accounting Software: Best free bank reconciliation software
- Xero: Most affordable bookkeeping Software with outstanding bank reconciliation features
- Sage Business Cloud Accounting: Best automated bank reconciliation software
- ReconArt: Best bank reconciliation software for small to medium-sized businesses (SMBs) with a large volume of transactions
What Bank Reconciliation Software Does
A bank reconciliation is generally done once a month and ties the balance on your bank statement to the balance in your check register or general ledger account. The difference between your bank statement balance and your check register should be:
- Deposits in transit: Deposits recorded in your check register, but are not yet on your bank statement.
- Outstanding checks: Checks or electronic payments recorded in your check register, but not yet on your bank statement.
Sample Bank Reconciliation
June 30, 202X
Bank Balance 6/30/202X
Plus Deposits in transit
Total Deposits in Transit
Less Outstanding Checks
Total Outstanding Checks
Check Register Balance 6/30/202X
QuickBooks Online: Best Overall Bank Reconciliation Software
We ranked QuickBooks Online as the best overall small business accounting software, and it excels with its bank reconciliation capabilities. The software supports the standard reconciliation process, allowing you to compare your monthly account statement to what you see online and ensure that the two closing numbers match. You can see an example of the QuickBooks Online reconciliation process by viewing our tutorial.
To simplify this process, QuickBooks Online pulls in both your bank statements and your individual transactions. You can also reconcile as you go with new transactions that move from your bank into your account registers. You can verify and add these transactions, ask QuickBooks Online to find a matching transaction in your online records, or record them as transfers. You can also further document it by specifying a category or marking it as billable to a customer.
- Audit log: The audit log can be useful to find errors and transaction histories while reconciling. You can track the date of any change to your books, the name of the user who made the change, the type of change, and the original transaction date and amount.
- Accountant access: You can invite your accountant to QuickBooks Online via email and they will have access to all of the features of your account at no additional cost to you.
- QuickBooks Pro Advisor Network: If you decide that you would rather an accountant handle your reconciliations, it is easy to find a certified accountant through the QuickBooks Pro Advisor Network or by subscribing to QuickBooks Live.
- Scalability: You have the option of upgrading your QuickBooks Online account as your business grows, and you will also have access to other Intuit products, such as QuickBooks Payroll and QuickBooks Point of Sale, to support other business needs.
Our Expert Opinion
QuickBooks Online is an ideal solution for most small businesses because of its ease of use and ability to scale as your business grows. Features such as batch categorization will help to streamline the reconciliation process, and the audit log is indispensable for troubleshooting errors. Access to the QuickBooks Pro Advisor Network for assistance is a bonus. The software’s robust feature set and access to hundreds of app integrations more than justifies its designation as the industry standard for small business accounting software.
NCH Express Accounting Software: Best Free Bank Reconciliation Software
NCH Express Accounts is an easy-to-use desktop accounting software that offers a free version for small businesses with less than five employees. Because it provides a quick solution to basic accounting tasks like invoicing and producing basic reports, it works best as a monitoring tool to track your transactions and view balances and reports. It allows you to reconcile your transactions manually or download a comma-separated values (CSV) file of your bank statement for quicker reconciliation, comparing your account ledger with the bank statement and matching transactions automatically.
- Web access: The software has an optional mobile browser access plan that allows for multiple simultaneous users on the cloud.
- Financial reports and analysis: You have access to more than 20 preconfigured reports, including income statement analysis, cash flow statements, and balance sheets. These reports can be saved as PDF or CSV files or emailed directly through the software.
- Integrations: NCH Express Accounts integrates well with other NCH software, such as inventory management, timesheets, employee productivity and management, and project management.
- Multicompany access: You can run multiple businesses with a single installation, including businesses operating with different currencies.
Our Expert Opinion
NCH Express provides the tools you need to handle most aspects of your company’s financial management. If you’re looking for a quick and easy solution to track payments and bills that also excels with bank reconciliation, it is worth considering this option. Out of all of the free accounting software that we have reviewed, we feel that it has the best bank reconciliation feature.
Xero: Most Affordable Bookkeeping Software with Outstanding Bank Reconciliation Features
Xero has similar features to QuickBooks, can accommodate unlimited users, and is available at a lower price. We selected it as the best overall QuickBooks alternative for small business accounting software, which is partly due to the ease of bank reconciliation. When you reconcile, Xero will notify you if your actual bank balance and the balance of the bank reconciliation in Xero don’t match. The bank reconciliation summary makes it easy to check for missing, deleted, or duplicated transactions. You also have access to a powerful mobile app that allows you to reconcile on the go.
- Auto-import of bank statements: Xero allows you to connect your bank feed so that your transactions will flow into your account daily. You also have the option to import your transactions manually instead.
- Transaction alerts: You can opt to receive alerts about unreconciled transactions on the Xero dashboard so that you can take action if necessary.
- Suggested matches: Xero will suggest matches for your transactions, categorize them automatically, and apply any rules that you set up.
- Bulk-reconcile transactions: With the Growing or Established plan, you can sort and group bank transactions, and then code and reconcile them in bulk. You can also apply a bank rule to a group of transactions.
Our Expert Opinion
Xero’s accounting software packs a punch when it comes to features and functionality. Its ability to add multiple users and ability to scale up its capabilities with apps and add-ons makes it an attractive choice for businesses looking for an alternative to QuickBooks. Its bank reconciliation features include transaction alerts and the ability to bulk-reconcile transactions, which will save you precious time and ensure that your data is always accurate.
Sage Business Cloud Accounting: Best Automated Bank Reconciliation Software
Originally called Sage One, Sage Business Cloud Accounting is subscription-based accounting software that gives you the flexibility and scalability available with a cloud back-end. Connecting your bank and other financial institutions can simplify income and expense tracking. It includes tools for bank reconciliation that allow you to create and split bank transactions. The software also uses artificial intelligence (AI) to learn from your categorizations, and it will populate and route transactions to the correct place automatically.
- Automated workflows: Sage Business Cloud Accounting allows you to automate your workflows. You can auto-post expenses and payments directly from your connected accounts and automate administrative tasks and invoicing easily.
- Bank rules: You have the ability to create and set bank rules that will be applied automatically to your transactions.
- Accountant access: The Accounting plan’s unlimited user capability allows you to share access with your accountant for easy collaboration in real-time.
- Audit trail: The audit trail is a complete record of all transactions entered, which is useful if you need to trace a transaction or if you’re asked to produce this as part of an audit. You can choose to view a summary or a detailed breakdown.
Our Expert Opinion
When you sync your bank account with Sage Business Cloud Accounting, it will import, categorize, and reconcile your transactions automatically. This gives you real-time cash balances while making month-end reconciliation much easier. The software also gives you the option to enter expenses manually if they’re not already recorded in the application. With its affordability and strong feature set, it was designed with small business owners and freelancers in mind.
ReconArt: Best Bank Reconciliation Software for SMBs With a Large Volume of Transactions
ReconArt provides a reconciliation solution that can accommodate a variety of business scenarios. It is entirely web-based and can be hosted on-site if desired. ReconArt’s reconciliation software helps businesses with bank and credit card reconciliation, financial close, balance sheet reconciliation, variance analysis, journal entry, and intercompany reconciliation. It distinguishes itself from other software for SMBs by providing a comprehensive workflow around journal entry posting.
- Journal entries: ReconArt helps you to ensure that all journal entries posting to the general ledger (GL) are correct and that there is a controlled and audit-proof journal entry posting process.
- Approval workflows: You have the ability to configure approval workflows based on amount thresholds or different risk levels.
- Reconciliation types: ReconArt supports all reconciliation types, including balance sheet, trades and positions, intercompany, ledger to subledger, accounts receivable (A/R)/accounts payable (A/P), GL/suspense, payments, credit card, and bank accounts.
Our Expert Opinion
ReconArt’s reconciliation solution delivers a high grade of automation and it consolidates several reconciliation practices and processes in a single platform. This intuitive and flexible program allows you to oversee all elements of the reconciliation lifecycle—from data integration and administrative management to transactional matching technology. It is an excellent choice for larger SMBs with a large number of transactions.
How We Evaluated Bank Reconciliation Software
There are many things to consider when determining which bank reconciliation software is the best option for your business. Depending on how sophisticated your needs are, it would ideally include the following capabilities, which we considered during our evaluation:
- Transfer transactions from your bank automatically
- Allow you to select transactions in your check register that appear on your bank statement
- Show you the difference between the cleared transactions in your check register and the statement balance continually
- Allow you to add, delete, or edit transactions in your register without leaving the reconciliation feature
- Once reconciled, print a reconciliation report showing all deposits in transit and outstanding checks.
- All deposits in transit and outstanding checks should carry over automatically to the next month’s reconciliation.
Bank reconciliation is important in ensuring your financial statements are accurate so that you can be confident that the numbers you report to the IRS are correct. It is also key to ensuring that there aren’t any discrepancies that could point to fraudulent activity within your accounts. Depending on the size and needs of your business, you may decide to use accounting software with basic reconciliation features or one that automates the reconciliation process.