Bank reconciliation means comparing your bank statement with your ledger line by line, so every payment is matched to an invoice or a bill and every difference is explained. In Singapore the work is mostly matching FAST and PayNow credits to invoices. Done weekly, it keeps GST, debtors and cash reporting reliable.
There are two records of the same cash: the bank statement, which is the bank's version, and the cash book or ledger, which is yours. They should end the month at the same balance after you list timing items. Anything left over is an error, a missing entry or a fraud signal.
The reconciliation runs in both directions. Receipts are matched to sales invoices, and payments are matched to supplier bills, payroll runs, tax payments and director's loans. Bank charges and interest appear on the statement first, so you record them from there.
Month-end is the minimum frequency. Businesses that receive many PayNow credits benefit from a weekly review, because the longer a receipt sits unmatched, the harder it is to remember what it was for.
Start each reconciliation from the closing balance of the previous one. If the opening balance on your sheet does not equal last month's closing balance, something was changed after the period was closed, and that is the first thing to investigate.
Timing differences are the most frequent: a cheque issued but not yet presented, a deposit made on the last day and credited on the first of the next month, a GIRO debit that clears after month end. These are listed as reconciling items and clear in the following month.
Bank charges, foreign exchange margins and intermediary fees appear only on the statement. A customer who paid a foreign-currency invoice may have sent the full amount while the bank credited you less after deducting charges. The difference needs an expense entry, not a write-off of the invoice.
Errors by the business include a transposed amount, a duplicate entry and a receipt posted to the wrong customer. Look at differences divisible by nine, which are typical of transposed digits.
Look out for round-sum entries that appear and reverse in the same month. Repeated pairs of such entries may indicate that someone is using the bank account as a temporary store, which is worth a conversation with the signatories.
Match in layers. First, exact matches by invoice number in the reference field. Second, amount and date proximity for payments without a reference. Third, customer-by-customer review for the rest, using the remittance advice or an email from the customer.
Handle bundled payments with care. When a customer pays three invoices in a single transfer, split the receipt across the three invoices at the time you identify it, and note the remittance source. A single unexplained lump on the aged debtors report will otherwise re-appear next month.
For part payments, apply the amount to the oldest invoice unless the customer specifies another, and record that choice. Disputed amounts stay open, with a note, instead of being cleared with a journal.
Use the bank statement in a structured format if your bank offers one. Copying from a PDF introduces transcription errors that waste more time than they save.
A payment in US dollars or euros is recorded at the rate on the date it is received, and the invoice is revalued against it. The gain or loss is recognised in profit and loss. Choose the rate source and apply it every time.
If your bank credits a Singapore dollar account after conversion, you can see the effective rate by dividing the credited amount by the foreign amount. A large unexplained gap suggests deductions by intermediary banks.
GST-registered businesses must show GST in Singapore dollars on invoices in foreign currency. Keep the rate used on the invoice, because it may differ from the rate at the date of payment, and both rates appear in the working papers.
Rate differences on foreign invoices are small individually, but across hundreds of invoices they add up. A monthly summary of exchange gains and losses, reviewed against the average rate for the month, shows if a rate has been applied wrongly.
Reconciliation produces an up-to-date list of unpaid invoices. Review it weekly: invoices due this week, invoices overdue by up to thirty days, and those older. Treat each band differently, and set a person to own each overdue account.
A reminder message works best when it names the invoice, the amount, the due date and how to pay. Include the PayNow details again, because the customer may not have the original email.
Escalate consistently. A customer who sees a pattern of polite reminders followed by action on a particular date will pay on time more often than one who receives sporadic nudges. Keep a written record of every contact.
Distinguish disputes from slow payers. A disputed invoice needs a conversation and often a credit note, while a slow payer needs a reminder. Treating them identically wastes the goodwill of customers who have a legitimate query.
4invoices.net keeps your PDF invoices in an archive so you can look up an invoice number, date and amount while you reconcile. 4notify.net lets you send SMS or e-mail from your account, and you write each reminder.
4invoices does not import bank statements or match payments, and 4notify does not schedule reminders from an ageing report. Reconciliation is done in your bank's tools or your accountant's software.
Keep each month's signed reconciliation with the statement, the list of reconciling items and the aged debtors report. An auditor asked to sign off the year will start with those three documents.
If the reconciliation is prepared by one person and reviewed by another, record both names and dates. Segregation of duties is a basic control that costs nothing.
Manually mapping bank statement lines to invoices takes several hours every week as transaction volumes grow, and unmatched items accumulate into a reconciliation backlog that takes days to clear.
Reconcile bank statement lines against your invoice archive using invoice numbers, in your bank's tools or your accountant's software. 4invoices does not import bank statements or match payments automatically.
Overdue debtors are not followed up consistently because the reminder process is manual — meaning some invoices are chased three times and others not at all, stretching average debtor days.
Track overdue invoices in your own list and send reminders by SMS or e-mail from 4notify when you decide to. Reminders are written by you; there is no scheduled ageing report.
At least monthly, so the books agree with the bank at each month end before the GST return and management reports. Companies with many PayNow or FAST receipts benefit from weekly matching, because unmatched credits are easier to identify while the transaction is recent. A written routine with a named owner keeps it from slipping.
Identify the invoices from the remittance advice or an email from the customer, and split the receipt across them in your ledger on the day you find out. Record how you identified the split. Without that, the lump payment reappears on the aged debtors report and can be matched to the wrong invoice later.
Intermediary banks can deduct charges, and the conversion to Singapore dollars happens at the receiving bank's rate. Record the amount actually credited, treat the shortfall as a bank charge or exchange difference and keep the statement as evidence. Do not reduce the invoice unless the customer agrees to a discount.
Do not leave it in the ledger as unallocated cash for long. Check the sender name and reference, compare with open invoices of the same amount, and ask the customer or the bank if needed. If you cannot identify the sender, hold the amount in a suspense account and keep the evidence of your enquiries.
Yes, a spreadsheet works for a small business if you keep it disciplined: one sheet for statement lines, one for open invoices, and a column recording the match. The risk is formula errors and lost history, so lock closed months and keep a copy of each month's reconciliation with the statement.
PDF invoices and an archive to reconcile against. Bank matching is done in your bank or accounting tool.
