The Hidden Truth About Bank Statement Accuracy: Why Reconciliation Is Your Superpower

Taylor Vanderburgh
Oct 24
4 min read

When it comes to managing your business finances, most owners assume their bank statements are 100% accurate. After all, these numbers come straight from Canada’s largest financial institutions—what could go wrong? Surprisingly, more than you might think.

How Accurate Are Bank Statements Really?

Even the Big 5 banks — RBC, TD, Scotiabank, BMO, and CIBC — experience transactional discrepancies. While they maintain world-class systems, small human or system errors still slip through the cracks.

Although there’s no public disclosure from Canadian banks or payments-system operators that states exactly how many banking transactions contain processing errors (as opposed to fraud or unauthorized use), the scale of the system means even a very small error rate translates into large absolute numbers.

For example, if Canada’s banking system processed roughly 10 billion transactions in a year, and even 0.1 % of them contained an error, that would mean about 10 million faulty transactions. If the average transaction value was around $200, that’s nearly $2 billion in mis-posted or incorrect transactions every year.

In short, your bank statements are very accurate, but in a system processing billions of transactions, “very accurate” still leaves room for thousands—or even millions—of mistakes.

Below we've given you the most common bank statement errors as well as some real-life examples you might see.

Duplication or Omission of Transactions

Sometimes a transaction appears twice or not at all. For example, RBC and Scotiabank clients have reported identical card purchases showing multiple times due to duplicate transaction processing. Conversely, an omitted transaction could mean a vendor payment is missing entirely from your statement.

Why it matters: Reconciliation catches these mismatches so they don’t distort your records.

Incorrect Fees or NSF Charges

Banks occasionally apply duplicate service fees or NSF penalties by mistake. For instance, double NSF charges can appear when payment systems retry transactions simultaneously.

Why it matters: Quick review helps you dispute errors before they snowball into cash flow issues.

Misapplied Deposits or Transfers

Deposits may post to the wrong account. For example, Scotiabank users have reported small unexplained deposits and later learned they were merchant posting errors.

Why it matters: Consistent reconciliation ensures deposits and income track correctly against your records.

Delayed Posting of Payments

Payments may not display immediately, especially with weekend transfers or dated cheques. You might think you’ve paid a vendor, but your statement doesn’t show the debit until after month-end.

Why it matters: Without matching cleared transactions, your books can show misleading balances.

Fraudulent or Unauthorized Charges

According to the Canadian Bankers Association, 1 in 20 Canadians report at least one unauthorized banking charge yearly — stemming from card skimming, phishing, or online scams.

Why it matters: Spotting unusual withdrawals early improves your odds of recovering lost funds.

Human Error

Hey - the bank teller is only human! Even in an age of automation, simple human slip-ups remain one of the leading causes of statement discrepancies. Whether it’s a missed keystroke, a duplicated deposit, or a misread figure at the end of a long workday, manual input errors happen far more often than you’d expect. These errors include:

Depositing a cheque twice: A bank may scan the same cheque twice, or perhaps you deposit it at an ATM after capturing and submitting it online. If the cheque clears both times, the error can remain hidden until the payer’s reconciliation flags it for review.
Missing keystrokes: Typing $1,850 instead of $10,850 when entering a payment or bill
Reversed or transposed digits: A difference that looks minor but can ripple through financial statements—transposition remains one of the most frequent manual data entry mistakes at the bank. For example: recording $986 as $968, creating an 18-dollar difference divisible by 9 (a telltale sign of transposition).
Decimal or slide errors: Entering $150 instead of $15.00 or misplacing a period when typing transaction values introduces significant distortions.

Why Reconciliation Matters

Bank reconciliation might sound a bit dry, but it’s actually super important for keeping your business’s finances in check. What does reconciliation mean? Well, we try to define it as simply as possible: verifying your numbers with an outside source.

Basically, it’s all about making sure your own records match up with what the bank says—so you catch any mistakes, whether they’re from your side or the bank’s. It allows you to spot errors early, fix them fast, and catch any shady unauthorized activity before it turns into a bigger problem. When we hear "unauthorized activity", we think of hackers from far away. But theft can come from suppliers, customers, employees and—yes—even the bank.

Doing regular reconciliations is a simple habit that goes a long way in keeping your financial records accurate and your business protected.

The goal is to reach a $0.00 difference, meaning every transaction in your books aligns perfectly with your bank statement. Here’s an example:

💡 QuickBooks Online Reconciliation Example:

QuickBooks Online will have you input the ending balance from your bank statement and compare it against what has cleared from your bank feeds for a fast and easy reconciliation. The equation looks like this:

STATEMENT ENDING BALANCE - CLEARED BALANCE [BEGINNING BALANCE - PAYMENTS + DEPOSITS] = DIFFERENCE

$0.00 is your end goal for the Difference. If something doesn’t line up, it will not balance and it will show up as one of these two:

A transaction on the bank statement that isn’t in your books
An transaction in your books that isn’t on the bank statement

If mistakes are the villains, bookkeeping is the hero. In the battle for financial accuracy, precision always triumphs—making regular reconciliation a true superpower for small business finances.

Need help with the reconciliation process? We're here to answer any questions you may have! Get in touch with Simcoe Office Solutions today!