Balance not reconcilling with bank statement


sorry if this is already on here somewhere, I couldn’t find anything on it.

I am trying to reconcile, however I received cash income which I would bank once a month (for ease!) However the incomes I’ve received were obviously not shown on my bank statement. So each month it thinks my balance is over. Because the sales were done in the past I haven’t done any invoices for the sessions.

For example in one month I would do three Personal Training sessions paid in cash totalling £60.00, however I wouldn’t put the cash into my bank account until the month after. At the time I was just writing everything in and out on a little notepad! I am going back as far as 2014 and inputting them on here. How would I rectify this, could I just change the dates on the transactions to when I actually banked the cash?

This may seem very stupid however i’m new at accounting and can not afford to pay someone to book keep!

Thank you


Hi @UniquelyTrained

You should be able to change the date on the transactions, but it depends really on how you’re dealing with the cash payments.

The correct way to account for it would be to:

  1. Record the money in transaction in ‘Petty Cash’
  2. When you bank it, tag the deposit as a transfer from Petty Cash to Current Account

In this instance, the petty cash account reflects what’s in your cash balance, and the current account reflects what’s in the bank. This would be the easiest way.

As they’re in the past, I’m assuming they’re there purely for record keeping. Recording them on the date they were banked should be fine. However, if at the time you were on the VAT cash accounting scheme for example, you should record the date you received the money. Even though it’s in the past, it’s usually good to keep things accurate just in case HMRC ever query anything (I believe accounts should be kept for 6 years?)

I hope that helps?

Yes it is just to keep a record, I agree i would like to keep it accurate. That’s great thanks I’ll do it the way you suggested. I’m not VAT registered, I’m a sole trader and just recording my part time self employed business account.

Thanks for your help