How to reconcile a bank statement in the UAE step by step

Do this within the first week of the following month. The details are still fresh, staff remember what an odd transfer was for, and errors can be fixed before they reach the VAT return or the management accounts.

Download the month’s statement for each account from online banking. Excel or CSV is easiest to work with; PDF is fine if your software can read it. Check that the opening balance matches last month’s closing balance on the statement, and that you have every account, including USD accounts, deposit accounts and credit cards.

Tick off each statement line against the ledger: customer receipts against invoices, supplier payments against bills, the WPS salary debit against salaries payable. Most lines match on amount and date. The remainder fall into a few groups, and each needs its own response.

• In the bank, not the books: bank charges, interest, direct debits, customer transfers nobody recorded. Post them
• In the books, not the bank: cheques issued but not presented, deposits in transit. These are timing differences
• Different amounts: foreign currency conversions, short payments, bank fees deducted from receipts. Correct or split them
• Duplicates: the same receipt recorded twice, once from the bank and once from an invoice. Reverse one

Start with the balance per bank statement. Add deposits in transit. Deduct unpresented cheques. The result should equal the balance per books. If it does not, the difference is an unidentified item that needs finding, not a plug.

Balance per bank at 31 October: AED 412,600. Deposit made on 31 October but credited on 2 November: AED 18,900. Cheque 004417 to a supplier, issued 28 October, not yet presented: AED 26,250. Adjusted bank balance: 412,600 + 18,900 − 26,250 = AED 405,250.

Balance per books before adjustments: AED 405,971. Unrecorded items on the statement: monthly account fee AED 105 plus AED 5.25 VAT, and a returned cheque fee AED 600 plus AED 30 VAT, total AED 740.25. A customer receipt booked as AED 15,800 was actually AED 15,820: add AED 20. Adjusted books: 405,971 − 740.25 + 20 = AED 405,250.75. A AED 0.75 difference remains, traced to a rounded FX conversion on a USD receipt and corrected.

Reconcile monthly at least, weekly if you have high volumes. Our view: an unreconciled bank account is the single best predictor of a messy year-end, and the work only gets harder with age. Never carry an unexplained difference forward “to look at later”.

Keep PDCs out of the bank account until they clear. Record bank charges with their VAT so input tax is not lost; explicit bank fees are generally taxable supplies under Article 42 of the VAT Executive Regulation.

HelloBooks does not offer live feeds from UAE banks. Instead, you upload the statement in PDF, CSV or Excel from any bank, including Emirates NBD, ADCB and FAB. The AI agent reads the lines, matches them to invoices, bills, salary journals and transfers, suggests entries for unrecorded charges with their VAT, and leaves the uncertain ones for you.

You review the suggested matches, approve them, and the reconciliation report shows the timing differences that remain. Ask “what is still unreconciled on the FAB account for September?” and you get a short list rather than a spreadsheet.