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Reconciliation means every transaction in your bank account has been explained: reconciled against an invoice or bill, categorised as income or an expense, recorded as a transfer, or marked personal. Once a period is reconciled, the figures in your reports are the figures in your bank, and a quarterly update becomes a review rather than an investigation.
The loop
Bring it in. Transactions arrive from a bank feed, or you import a statement.
Let the rules run. Anything your bank rules recognise is sorted and offered for confirmation.
Work the queue. Everything else sits in To reconcile, and you tell RentalBux what each one was.
Close. With nothing unexplained left, the difference between bank and book is £0.00.
The Two Sums On Every Account Card
Each account shows its own arithmetic, so you can see where a gap comes from.
Sum | What it tells you |
|---|---|
Opening + Money received − Money spent = Bank statement | What the bank says you have |
Bank statement − RentalBux book = Difference | How much is still unexplained |
Difference reaching £0.00 shown as In sync is what “reconciled” looks like.
The Four Ways To Explain A Transaction
Tab | Use it when | Result |
|---|---|---|
Find & reconcile | There is an invoice or bill behind it | The bank line and the document are linked and both close |
Categorise | There is no document a card payment, a bank charge | Income or expense recorded against a category and property |
Transfer | Money moved between your own accounts, or to a co-owner | Recorded, and kept out of income and expenses |
Notes | You need to remember something about it | A private note; the transaction still needs one of the three above |
A Sensible Order
Rent first. It is the largest and most repetitive, and it clears most of the queue
Then known suppliers; mortgage, insurance, utilities, the letting agent
Then transfers between your own accounts and payments to co-owners, which are neither income nor expense
Then one-offs, which are the ones that need thought
The Tabs Across The Transaction List
To reconcile · Reconciled · Transferred · Personal. The counts are the honest picture of where an account stands. Anything reconciled can be reverted: the transaction moves back to To reconcile and any link to an invoice or bill is released.
How Often
Monthly is enough for most portfolios and takes minutes once rules are doing the repetitive work. Leaving it to the end of a quarter turns a ten-minute job into an afternoon, because by then you have forgotten what a payment was for.
What “Done” Looks Like
Nothing left in To reconcile for the period
Difference showing In sync on every account
Every rent line either reconciled or showing as arrears on purpose
Transfers recorded as transfers, not as income at one end and an expense at the other
Check first
Do not park unexplained items in a general category to clear the queue. It produces a reconciled-looking period with a figure nobody can trace, which is exactly the problem the figures were meant to solve.
Note: Reconcile before you file, not after. The pre-submission checks in MTD Tax look at exactly this.
What The Word Means
Reconciling sounds technical and is not. It means going through the money that moved and saying what each item was. When there is nothing left to say, the account is reconciled.
Worked Example
A five-property portfolio, one business account, a month’s worth of activity: 23 transactions. Rules sort 14 of them — mortgage, council tax, two agent deposits, the energy supplier. Rent for three properties matches the open invoices. That leaves six: a builders’ merchant card payment to categorise, a transfer to savings, a payment to a co-owner, two small bank charges to split across properties, and one payment nobody recognises. The whole month is about eight minutes, and the last one is the only one that needs thought.
Why The Difference Figure Matters
Bank statement − RentalBux book = Difference is the single number that tells you whether your reports can be trusted. A difference of £0.00 means every pound the bank saw has been explained. Any other number means your income statement and your bank disagree, and the return you file from it will inherit the gap.
Doing It Monthly
The work is the same size whenever you do it; only your memory changes. A payment from three days ago is obvious. The same payment in January, three months later, is a small research project.
What To Do With The One You Cannot Identify
Leave it. An honest unmatched transaction is better than a wrong category, and it is a short list to take to the bank or the tenant. Parking it in “other expense” to clear the queue is how a figure nobody can explain gets into a return.