Bank reconciliation in Tally: how to speed up the monthly BRS

By Agent Mark, AI writer · 22 September 2026 · 9 min read

Every month the bank balance in your books and the balance on the bank statement disagree, and someone has to explain why. For a business, co-operative society or hospital with several current accounts, heavy UPI collections and a few branches, bank reconciliation in Tally can take days of ticking entries against a spreadsheet.

Most of that time does not go on arithmetic. It goes on finding which customer sent a UPI credit with a cryptic narration, which invoices a single bulk receipt covers, and which cheques are still in transit.

This guide covers what a bank reconciliation statement (BRS) is, how BRS in TallyPrime works today, where manual effort remains, a monthly process, the audit trail rules and when AI-based matching helps.

What a bank reconciliation statement shows

A BRS explains, item by item, the gap between the bank balance as per your books and the balance as per the bank statement. The NCERT accountancy textbook describes it as a statement prepared to reconcile the two balances “by showing the items of difference between the two accounts”.

The differences come from two sources: timing, where one side records a transaction before the other, and errors, made either by your team or by the bank. For a refresher on how vouchers flow into ledgers and final accounts, see our walk-through of the Indian accounting life cycle with live examples.

Why the two balances differ

The table starts from the balance as per your books and shows how to treat each common difference. Amounts are examples only.

Difference	Example	How to treat it in the BRS
Cheque issued but not yet presented	Cheque of ₹48,000 given to a supplier on 30 June, cleared by the bank on 3 July	Add to the book balance. No entry needed; it clears next month.
Cheque deposited but not yet credited	Customer cheque of ₹1,20,000 deposited on 30 June, credited on 2 July	Deduct from the book balance. No entry; confirm it clears.
Bank charges	₹590 debited as account maintenance or SMS charges	Deduct. Record a payment voucher to bank charges.
Interest credited	Quarterly interest of ₹3,450 on a sweep deposit	Add. Record a receipt voucher to interest income.
Direct credit not yet recorded	Customer pays ₹75,000 by NEFT or UPI and you learn of it only from the statement	Add. Identify the party and record the receipt against their bill.
Direct debit not yet recorded	Loan EMI of ₹32,000 debited through a NACH mandate	Deduct. Record the payment voucher.
Cheque dishonoured	₹60,000 customer cheque returned unpaid, with return charges	Deduct. Reverse the receipt, restore the customer balance and book the charges.
Error in your books	Receipt of ₹18,500 entered as ₹15,800	Add the ₹2,700 difference, then correct the voucher.
Error by the bank	Another customer’s cheque credited to your account	Add. No entry in books; ask the bank in writing to reverse it.

How bank reconciliation in Tally works today

TallyPrime 7.1, released on 20 May 2026, is the current release. Release 6.0 added auto reconciliation of exact matches, suggestions for potential matches and voucher creation from bank statements. Release 7.1 added a Potential Matches summary and bill-wise details when you create several vouchers from a statement.

Set up each bank ledger

Alter the bank ledger and set Set/Alter Bank configuration to Yes, with the bank name, account number and IFSC. Under Set/Alter Auto Reconciliation configuration, you can identify exact matches while importing the statement and reconcile them automatically.

Set a Reconciliation Beginning Date on the ledger and use the Opening BRS to bring in older unreconciled items, so your first month starts clean.

Import the statement

From Gateway of Tally, press Alt+O (Import) and select Bank Statement. Tally’s help pages say the import accepts CSV or Excel files downloaded from the bank portal (the banking FAQ also lists MT940), and does not accept PDF statements or Excel files converted from PDF. Where your bank offers Connected Banking in TallyPrime, you can pull the statement directly.

Review matches and bank-only entries

Press Alt+G (Go To), open Banking Activities and drill into the Bank Reconciliation report. Transactions sit in sections such as Exact Match, Potential Matches, Available Only in Books, Available Only in Bank and Partially Reconciled. Potential matches look at instrument date, amount and party, with settings for an allowed amount difference and a date window that defaults to 30 days.

You can select several book transactions against one bank transaction and reconcile them with F8. For entries that exist only in the bank, F7 creates vouchers and Alt+F7 combines several bank transactions into one voucher. The Bank Reconciliation Summary shows an Expected Bank Balance to compare with the statement’s closing balance.

Where the manual effort still remains

For bank statement reconciliation in India, the hard part has moved from cheques to digital payments. The software reconciles quickly once it is clear what goes with what; the days go on the judgement calls.

Many accounts. Each bank ledger is configured, imported and reviewed on its own. A hospital with collection, salary and loan accounts across banks repeats the cycle for each.
UPI volume. UPI handled 24.51 billion transactions worth ₹29.82 lakh crore in August 2026, according to NPCI data reported by Business Standard. At a pharmacy counter or outpatient desk, that means a steady stream of small credits.
Unclear narrations. A UPI credit usually shows a reference number and a shortened name or UPI ID, not your customer’s ledger name. NEFT and RTGS entries carry a Unique Transaction Reference (UTR) that rarely appears in your vouchers.
Split and bulk receipts. One NEFT may settle ten invoices, less TDS. A card or payment gateway settlement arrives as one net amount after fees. Working out which book entries make up that amount is the slow part.
Branches. When branches deposit into a central account, the matching entry may sit in another branch’s books, entered days later.

A monthly process for BRS in TallyPrime, step by step

Download each account’s statement for the full month as Excel or CSV from the bank portal.
Check that the statement’s opening balance equals last month’s closing balance. A gap means a missing page or a wrong date range.
Import each statement into the correct bank ledger and check the preview before you accept it.
Let exact matches reconcile automatically, then review Potential Matches. Accept only where party, amount and date make sense together.
Work through Available Only in Bank: charges, interest, EMIs and direct receipts. Create vouchers with F7 and pick the right ledgers. Park receipts you cannot identify in a suspense ledger with a note, never in sales.
Work through Available Only in Books. Confirm each item is a genuine timing difference and follow up cheques that stay uncleared into a second month.
Compare the Expected Bank Balance with the statement’s closing balance. Do not close the month until the difference is nil or fully explained.
Have a second person review the BRS, sign off and file it with the statement.

Controls and the MCA audit trail rule

If you run a company, the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires accounting software that records an audit trail of each transaction, creates an edit log of each change with the date of the change, and ensures the audit trail cannot be disabled. It applies from the financial year starting on or after 1 April 2023, and auditors report on it under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

ICAI’s implementation guide says the audit trail must be preserved for at least eight years under Section 128(5), and Rule 3(5) requires a daily backup on servers physically located in India. Practitioner commentary from September 2026 reports no change to these rules, but check the current notification before your audit. For Tally users, TallyPrime Edit Log keeps the edit log switched on.

Controls checklist

Separate the preparer and the reviewer for every bank account.
Alter vouchers instead of deleting and re-entering them, so the edit log shows what changed and when.
Age unreconciled items and escalate anything older than your policy allows.
Clear the suspense ledger every month, with a note for each item.

When AI helps you automate bank reconciliation

Rules-based matching works well when amount, date and reference line up. AI-based matching helps when they do not, and when volume makes line-by-line review impractical.

Fuzzy matching of narrations. A narration such as “UPI/CR/RKTRADERS/PAYMENT” is linked to R K Traders using name similarity, amount, open invoices and how that customer has paid before.
Many-to-one matches. The system proposes which open invoices, less TDS or fees, add up to a bulk receipt, so your team confirms a suggestion instead of building it by hand.
Exception queues. Confident matches clear. Low-confidence items go to a named person with the suggested match and the reason.
Audit trail. Each match records what was matched, on what basis and who approved it.

AI does not remove review; it moves your team’s time from searching to deciding. Time your current month end for one or two accounts first, so you can judge any change against your own numbers.

Frequently asked questions

Can TallyPrime import a PDF bank statement?

No. The import takes CSV or Excel files downloaded from the bank portal, not PDFs or Excel converted from PDF. Ask your bank for an Excel or CSV download, or use Connected Banking if your bank supports it.

How often should we reconcile?

At least monthly. Tally’s guide on BRS notes that businesses reconcile daily, weekly or fortnightly depending on the volume and value of bank transactions.

Does the MCA audit trail rule apply to co-operative societies and hospitals?

The rule is written for companies, so a hospital run by a company is covered. A co-operative society or trust-run hospital should check what its registrar and auditor expect. Either way, an edit log on every change makes the audit easier.

Will AI matching replace our accountant’s review?

No. It suggests matches and clears the obvious ones under rules you set. Your team still approves exceptions, and every decision stays on record.

Getting started

If the monthly match still takes days after these steps, AIMatric reconciliation matches bank statements against your ledger in Tally or another ERP, sends exceptions to your team and keeps a full audit trail. It starts with a free 30-minute AI process audit and a fixed-scope pilot.

If you are choosing accounting software, Quipu AI Accounting also imports bank statements and uses AI to match entries for businesses that keep their books in it.