Bank Reconciliation in Singapore: A Guide for Business Owners

You may think that your financial records are flawless, but in the current landscape where businesses work with multiple banks and vendors, oversights in transactions could lead to heavy losses. Bank reconciliations help you avoid these losses.

In this article, you will learn the fundamentals of bank reconciliation. We will show you how to implement it seamlessly into your business’s workflow, ensuring you can always be confident that your financial records are accurate. We will also share how Wise Business allows you to streamline your bank reconciliation process.

Table of contents
What is bank reconciliation? Bank reconciliation example How to perform bank reconciliation? Common causes of mismatches Tips for successful bank reconciliations Ditch manual reconciliations: Connect your accounting with Wise Business today Frequently Asked Questions (FAQs)

What is bank reconciliation?

Bank reconciliation is the process of double-checking that transactions from your financial records match those on your business bank statements. A bank reconciliation statement¹ may be produced, giving you a list of transactions that do not tally, and changes made to keep your accounting up to date.

What is the purpose of bank reconciliation?

Bank reconciliation helps you catch errors in your financial records, spot missing payments, identify double charges or fraud, and ensure that your business is not overspending. This process also helps keep your books tidy for efficient financial reporting and subsequent tax filings.

Ever had the experience where your wallet had less cash than you thought you had? Maybe it was because you forgot that you had bought that extra pack of M&Ms. In business, this could be due to a lag in expense reporting, a missed payment or worse, fraudulent transactions. Here’s an example.

Bank reconciliation example

You had invoiced an international client for USD 1,800 and received updates that the payment had been made via wire transfer. Your records were updated with the invoice amount, but upon reconciliation, you find that the amount doesn’t tally because of fees and foreign exchange rates. This is how it might look:

As per accounting records:

Transaction Date	Transaction Description	Transaction amount (USD)	Transaction amount (SGD)
18 June 2025	Invoice to Client A (1 USD = 1.29 SGD)	USD 1,800	SGD2,322

As per the bank statement:

Transaction Date	Transaction Description	Transaction amount (USD)	Transaction amount (SGD)
19 July 2025	Incoming payment from Client A (1 USD = 1.28 SGD)	USD 1,800	SGD2,304
21 July 2025	Handling fee		SGD 10

In this case, your accounting records would be off by SGD 28 due to the difference in foreign exchange rates and the failure to record the handling fee.

You would need to update your accounting records accordingly to ensure they match up with your bank statement.

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Who should be handling your business’s bank reconciliation?

This depends on the size of your business. If you are a one-man business, the task will fall on your shoulders. However, if your finances are complex or if you have a bigger team and budget, you should outsource or delegate this task to:

• Accountants or Bookkeepers
• Finance Manager
• Internal auditors
• Administrative staff (for smaller companies)

It is ideal to assign someone who is detail-oriented to work on your bank reconciliation. For an added layer of accuracy, bank reconciliation reports should be reviewed by the business owner or a third party periodically.

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How to perform bank reconciliation?

How do you start your bank reconciliation process? Here is a quick step-by-step guide:

1. Gather Your Bank Records: Download your latest bank statements for the period. If you are using accounting software, your bank transactions may already be imported automatically. Account software can help businesses in Singapore save time on finance tracking and bank reconciliation. Here are the top accounting software to consider.
2. Gather Your Business Records: Access your internal records. Likewise, if you are relying on accounting software, you should be able to see your records within a single platform. If you are a Wise Business user, your transactions can be recorded and imported seamlessly with a range of accounting software.
3. Find Your Opening Balance: Note the closing balance from your last reconciliation. This will be your opening balance for the current bank reconciliation process.
4. Match Transactions: Go through your bank statement line by line and match each transaction to your business records. You should account for the amount, the date of the transaction and if necessary, the purpose of the transaction.
5. Identify Discrepancies: Flag any transactions that don’t match. Examples include missing entries, wrong amounts, additional transactions in your bank statements, or dates that don’t line up.
6. Adjust for Errors: Look for possible reasons to adjust for errors. For example, data entry errors are most common and can be easily updated. You should also record any bank fees, interest, or unentered transactions, and correct any typos or mistakes in your business records.
7. Recalculate the Balance: After making adjustments, your business record’s closing balance should match your bank statement’s closing balance.
8. Finalise Reconciliation: If everything matches, you can finalise the bank reconciliation process. Mark the period as reconciled in your software or spreadsheet and save a copy of both sets of records.
9. Review Regularly: You should schedule regular bank reconciliations to ensure that your financial records are accurate and to avoid any delays in rectifying discrepancies. While monthly review is encouraged, smaller businesses with fewer transactions or a lack of manpower may want to schedule a reconciliation once every two months.

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Types of bank reconciliation

In general, bank reconciliation involves the matching of your financial records to your bank records. That said, businesses handle a range of financial transactions in their day-to-day operations. You can break down your bank reconciliation processes by transaction types or delegate them to multiple staff to minimise potential human errors in the bank reconciliation process as well.

Here are the different types of bank reconciliation to consider:

• Reconcile Bank Statement: Matching your bank account statement with your business’s internal cash records. This is the fundamental process that you shouldn’t skip. The business owner or finance manager can do this easily with the help of accounting software.
• Reconcile Payroll Accounts: Matching your payroll records (salary, CPF, SDL, levies) against bank transactions and payroll service reports. This can be done by your HR manager or administrative team, and can be optimised with the help of payroll software.
• Reconcile Invoices: Matching your customer and supplier invoices against incoming payments and outgoing expenses to catch missed payments, duplicate billing, or overpaid vendors. It also helps your team identify if there are double billings or if you have overpaid vendors.
• Reconcile Balance Sheet: This involves verifying that all assets, liabilities, and equity balances on your balance sheet match supporting documents or schedules. This includes checking bank accounts, CPF and tax liabilities, and loan balances. Your accountant or finance manager can assist, and accounting software can streamline the process.

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Common causes of mismatches

Now that we understand the process of bank reconciliation in Singapore, here are some common challenges and discrepancies you should take note of.

Missing Entries, duplicate entries or wrong amounts

Transactions in your bank statement that were not recorded or recorded incorrectly in your accounting records or spreadsheets. These are usually due to manual input errors, which can be easily avoided if you are using a reliable accounting software.

Another common cause for such issues is bank fees or interest, which are usually charged by the bank and reflected on bank statements, but are not captured within your business’s financial records. Likewise, accounting software can help negate this issue.

Finally, such errors may also be a result of lapsed payment from clients, refunds from vendors or overpayment of suppliers. Your team should actively seek to rectify this to reduce any hidden losses.

Time lag

Some transactions take a while to be reflected in your bank statements, even if they have been recorded in your financial records. Such examples include uncleared cheques, weekend transfers, or even pending GIRO payments. Such discrepancies may affect your balances but do not require any further action.

Foreign currency issues

Differences due to exchange rate fluctuations or foreign currency conversion fees. Such issues can lead to confusion during reconciliation, but can be rectified easily by accounting for foreign exchange rates accurately. Using a multi-currency account like Wise Business can help to reduce such issues, as you can hold your money in foreign currencies instead of being forced to convert all foreign currencies back to SGD.

Unauthorised or fraudulent transactions

Such transactions are usually unexpected and often unapproved. They could signal serious problems like misuse of company funds or phishing scams. Having a regular bank reconciliation schedule helps you to catch such transactions early, allowing you to reduce your risks and losses.

🚀 How a Singapore software development company identified gaps in their finances and cut costs through bank reconciliation

For Axpara, a fast-growing remote-first company in Singapore, cross-border payroll started to become a headache as they scaled. Working with numerous clients and remote teams meant countless transactions, hidden fees, and hours lost to reconciliation processes. To make things worse, inefficiencies of legacy financial systems meant they were losing tens of thousands of dollars annually. Hence, they turned to Wise Business for transparent foreign currency conversion rates, easy batch payments, and simpler, automated reconciliation. The shift saved them over SGD 50K a year. ➡️Read Axpara's full case study here.

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Tips for successful bank reconciliations

At this point, you should be convinced of the importance of bank reconciliations. Here are some tips to help you further:

• Do Bank Reconciliations on a Fixed Schedule: Table it into your calendar, set a monthly routine, and delegate the task to someone in your team to ensure that it gets done. Carrying out bank reconciliations regularly helps ensure that your financial records are accurate and helps you spot any discrepancies or losses early. It also helps to ensure that your accounting is timely.
• Consolidate Accounts: The more accounts and cards your business has, the more sources you will need to double-check to keep track of transactions. This tends to result in more room for error. Consolidating your accounts helps reduce such errors and saves time on reconciliation.

💡Pro-tip: Consider consolidating your currencies into a single multi-currency business account like Wise Business, which lets you hold and manage 40+ currencies while enjoying low-fee transactions and saving on hidden foreign exchange markups.

• Take Advantage of Technology: Manual tracking leads to errors and takes up too many manhours. Automating your financial tracking helps to ensure that it is done consistently and accurately.

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Ditch manual reconciliations: Connect your accounting with Wise Business today

💡Did you know that Wise Business users can choose to integrate their business account with a wide selection of accounting software? Simple one-time integration with popular accounting tools like Quickbooks and Xero could help you eliminate unnecessary manual work and make bank reconciliation a breeze for your finance team and accountants.

• Sync transactions with Xero and QuickBooks easily.
• Cut down on manual work and minimise errors with automatic reconciliation.
• Always get the mid-market rate with transparent conversion fees starting from 0.26%.
• Use Wise Business’s invoicing tool to create free, professional invoices in just a few clicks.

➡️Explore Wise Business today

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Frequently Asked Questions (FAQs)

• Is bank reconciliation part of bookkeeping? Yes, bank reconciliation is a key part of bookkeeping. Bookkeeping involves recording your business’s financial transactions, and bank reconciliation is the process where you double-check that your records are accurate.
• How often should businesses perform bank reconciliation? You should perform bank reconciliation every month. If you are not able to spare the time or resources, you may consider doing it once every two months.
• What is the difference between bank reconciliation and financial reconciliation? Bank reconciliation is a subset of financial reconciliation. Bank reconciliation involves matching your business’s records with your bank statement, while financial reconciliation is the broader process of verifying that all your financial accounts are accurate in line with supporting records and documents.

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Conclusion

Bank reconciliation helps you spot discrepancies in your financial records and raise potential risks or fraudulent transactions. Here, we have provided a step-by-step guide so that you can carry out your bank reconciliations independently. Consider using accounting software that integrates seamlessly with your bank or multi-currency accounts like Wise Business to save time and minimise errors.

💡Having trouble managing multiple invoice payments efficiently? Wise Business can streamline your payment process, save you hundreds of manpower hours, and do it all with no hidden exchange rate markups.

• Create and send up to 1,000 payments with just one transfer.
• Simple process lets you upload a spreadsheet with invoice and currency information.
• Always get the mid-market rate with transparent conversion fees starting from 0.26%.

➡️Explore Wise Business Batch Payments today

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Sources:

1. What is a Bank Reconciliation Statement | Investopedia
2. Definition & Example of Bank Reconciliation | Corporate Finance Institute

Sources checked on 25 July 2025