How to Balance a Cheque Book


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If you use a cheque book, you need to know the basic additions and subtractions to keep it balanced. This basically means you record all transactions i.e., deposits (additions) and withdrawals (subtractions), made to your accounts. Many of us with cheque books hardly seek to reconcile our accounts at the end of the month. Doing so once a month will help you keep track of what you’re spending and uncover any errors or incorrect charges. Ultimately, this could help you catch fraud (If any), avoid overdrafts and other penalties, catch mistakes and keep track of your money.

What You’ll Need

To keep your cheque book in balance, you’ll need:

  • A recent bank statement
  • Receipts
  • Your personal register – basically, its a list of account transactions done over the month/period in question.

How to Prepare a Personal Register

If you don’t have a personal register, this is how to prepare one. A personal register will probably have six dedicated columns for the following information:

  1. Cheque number
  2. Date of the transaction
  3. A  description of the transaction i.e. to whom the cheque was written and/or for what
  4. Amount of withdrawal or payment – jot down the exact amount
  5. Deposits – be detailed and include your salary and any other deposits even cash gifts
  6. Balance – start with the opening balance (which is the closing balance of the previous month) then systematically add (any deposits or interest payments from savings/investments) or subtract (withdrawals, payments, and bank fees) transactions.

With this document on hand, enter all transactions into your personal register each and every time you transact. This includes ATM withdrawals, M-Pesa and online bill payments and debit card purchases.

How to Balance Your Cheque Book

Here is how to reconcile your bank account on paper:

  1. Add up all your deposits and withdrawals listed in your personal register.
  2. Assess if the total amounts (deposits and withdrawals) in your personal register match the amounts on your bank statement.

Balanced or Not Balanced

There are only two possible outcomes a balanced amount or unbalanced. If the amounts:

  • Match i.e., balance, then your work is done. Your chequebook is now balanced.
  • Don’t match i.e., not balanced,  double check everything again to verify the amounts and additions. It is easy to make mistakes with such transposing numbers, so it’s a great idea to check again.

Unmatched Amounts

After double checking and your amounts still, don’t match, this is the best course forward:

  1. Simply fix your own mistakes i.e. those times you took cash out at the ATM and failed to record it.
  2. If you can choose to believe the bank, adjust the balance in your own register to agree with your closing bank balance. When doing this, remember that your actual balance may be much less than what your bank account reflects if you have any outstanding cheques.
  3. Get in touch with your bank for review of your transactions – do so if you think a transaction is unauthorized or contains an error. Then look for further instructions from your bank on how to correct the problem.

Cheque Book Common Mistakes

Here are the most common mistakes when keeping a cheque book:

  • Forgetting to record each transaction and forgetting to record when it happens
  • Issuing worthless cheques i.e., bounced cheques – they are quite costly and should be avoided. To be safe, you’ll need to know how much money is in your account and the best way to do this is by balancing your cheque book often. This way, you will have an accurate number if you have any outstanding cheques.

Bottom Line

It is always advisable to regularly review your bank statements and compare them with your own records. This way you can verify that you and your bank are on the same page.

Meanwhile, You can click on the following links to read more about financial planning:

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Irene Makanga
Irene has an MBA in Finance and is an avid businesswoman, passionate about financial literacy.


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