Reconciliation

Guide 10: Reconciliation

Verify your records match your bank statements -- with AI-powered matching, PDF statement import, and loan payment breakdowns

Overview

Reconciliation is the process of comparing your OtterLedger records against your official bank statement. This catches errors, finds missing transactions, and ensures your financial data is accurate. OtterLedger makes reconciliation faster and more reliable by letting you import PDF statements directly, using AI to match transactions automatically, and providing a side-by-side Advanced Reconciliation View for easy visual comparison.

What you'll learn:

• How to start and complete a reconciliation
• Importing PDF bank statements for automatic parsing
• Using the Advanced Reconciliation View for side-by-side matching
• Reconciling loan and mortgage accounts with P/I breakdowns
• Handling discrepancies and creating adjustments
• Working with reconciliation history and reminders

Time required: 5-15 minutes per account with PDF import; 15-30 minutes for manual reconciliation

Prerequisites

Before you begin, make sure you have:

• An account with transactions in OtterLedger (see Guide 4: Accounts)
• Your bank statement -- either a PDF file (recommended) or the statement date and ending balance from a paper statement
• For loan accounts: the loan statement showing principal, interest, and escrow breakdowns (if applicable)

Starting Reconciliation

Step 1: Open the Reconciliation Center

Navigate to Reconciliation in the sidebar. The Reconciliation Center shows all your reconcilable accounts with their current status.

[Screenshot: Reconciliation Center showing account list with status indicators]

Each account card displays:

Tip: Accounts are grouped by type (Cash & Banking, Credit Cards, Loans, etc.) for easy navigation. You can also group by bank/institution.

Step 2: Select an Account

Click on the account you want to reconcile, then click Reconcile. If you have a reconciliation already in progress, you will see a Resume option instead.

[Screenshot: Account card with Reconcile button highlighted]

Step 3: Enter Statement Information

The Start Reconciliation dialog appears with the following fields:

1. Statement Date -- OtterLedger auto-predicts this based on your reconciliation history (e.g., if you reconcile monthly on the 15th, it suggests the next 15th). Adjust if needed.
2. Statement Ending Balance -- Enter the ending balance from your statement.
3. Beginning Balance -- Pre-filled from your last reconciliation. This should match the opening balance on your current statement.
4. Attach Statement (optional) -- Click Browse to attach a PDF or CSV bank statement file.

[Screenshot: Start Reconciliation dialog with date, balance, and file attachment fields]

Tip: If your account has an online portal URL configured, click Fetch Statement to open your bank's website directly from the dialog.

Step 4: Attach a PDF Statement (Recommended)

When you attach a PDF statement, OtterLedger uses AI to automatically extract:

• Statement period dates (start and end)
• Ending balance (fills in the balance field for you)
• Beginning balance (verifies it matches your records)
• All transactions (dates, descriptions, and amounts)
• Loan P/I breakdowns (for mortgage and loan statements)

You will see a parsing status indicator while the statement is being processed. Once complete, a summary shows the extracted information:

Jan 1, 2026 - Jan 31, 2026 -- 47 transactions

[Screenshot: Statement parsing in progress, then completed with extracted metadata]

Statement Validation

OtterLedger validates the attached statement and warns you about potential issues:

Warning: If you see a "Wrong statement" or "Duplicate statement" warning, double-check that you have the correct PDF before proceeding.

Step 5: Click Start

Once you are satisfied with the statement date and balance, click Start (or Continue if resuming). OtterLedger creates the reconciliation session and takes you to the reconciliation workspace.

The Reconciliation Screen (Simple View)

The Simple View shows all unreconciled transactions in a single list. This is the default view when no statement is attached, or when you want a straightforward checklist approach.

+---------------------------------------------------------------------+
| Reconciling: Chase Checking                                         |
| Statement Period: Jan 1, 2026 - Jan 31, 2026                       |
+---------------------------------------------------------------------+
| Opening Balance:         $1,892.30                                  |
| Cleared Deposits:       +$3,250.00  (2 items)                      |
| Cleared Payments:       -$2,598.63  (15 items)                     |
| Service Charge:            -$12.00                                  |
| Interest Earned:            +$2.33                                  |
| Cleared Balance:         $2,543.67                                  |
| Statement Balance:       $2,543.67                                  |
| Difference:                 $0.00                                   |
+---------------------------------------------------------------------+
| [ ] 01/02  Starbucks                           -$5.50              |
| [x] 01/03  Paycheck                        +$2,500.00              |
| [x] 01/05  Electric Co.                      -$125.00              |
| ...                                                                 |
+---------------------------------------------------------------------+
| [Add Transaction]  [Create Adjustment]  [Advanced View]             |
| [Save Progress]  [Finish Later]  [Complete Reconciliation]          |
+---------------------------------------------------------------------+

[Screenshot: Full reconciliation Simple View screen]

Understanding the Balances

Marking Transactions as Cleared

For each transaction that appears on your bank statement:

1. Find it in the OtterLedger list
2. Click the checkbox to mark it as cleared
3. Watch the difference update in real time

When a PDF statement is attached, OtterLedger uses AI to automatically match and clear transactions that have a high confidence match (70%+ confidence). You only need to handle the remaining unmatched items.

Filtering and Sorting

Use the toolbar controls to narrow down the transaction list:

• Filter by type: All, Charges, or Payments
• Filter by date range: Set a start and end date to focus on a specific period
• Sort by: Date, Amount, Payee, or Status
• Search: Type a payee name or amount to find specific transactions

Service Charges and Interest

If your statement shows a service charge or interest earned that is not yet in OtterLedger, enter it directly in the reconciliation screen:

1. Enter the Service Charge amount (e.g., $12.00 for a monthly fee)
2. Select a Category (defaults to "Bank Charges")
3. Enter the Interest Earned amount if applicable
4. Select a Category (defaults to "Interest Income")

These amounts are included in the balance calculation immediately. When you complete the reconciliation, OtterLedger creates the actual transactions for you.

Auto-Balance

When no statement is attached, OtterLedger runs an auto-balance algorithm that selects transactions within the statement period and tries to find the combination that brings the difference to zero. If it deselects any transactions, you will see a message like "Deselected 1 transaction to balance."

PDF Statement Import

PDF statement import is one of the most powerful reconciliation features. It eliminates the manual comparison process by letting OtterLedger read your statement directly.

How It Works

1. Attach the PDF in the Start Reconciliation dialog (or later via the Attach Statement button)
2. OtterLedger extracts text from the PDF using built-in parsing
3. AI parses the transactions -- identifying dates, descriptions, amounts, and transaction types
4. Transactions are matched against your OtterLedger register using amount, date proximity, and payee similarity
5. High-confidence matches are auto-cleared -- you only review the exceptions

Supported Statement Formats

Tip: PDF statements from major banks (Chase, Bank of America, Wells Fargo, First Citizens, etc.) are well-supported. If parsing fails for your bank, try exporting a CSV from your bank's website instead.

AI Matching

After statement parsing, OtterLedger matches each statement transaction to your register using multiple signals:

Each match receives a confidence score:

• 70%+ -- Auto-cleared (high confidence)
• 50-69% -- Shown as a suggestion for you to confirm or reject
• Below 50% -- Not matched; requires manual attention

AI Suggestions Panel

The AI panel shows suggestions based on the analysis:

• Smart Match Found -- A statement transaction matched to a register transaction. Click Confirm & Clear to accept or Not a Match to reject.
• Missing Transaction Detected -- A statement transaction has no matching register entry. Click Add Transaction to create it.
• Outstanding Check -- An uncleared check that may not have been cashed yet.
• Tip -- General advice about the current difference or potential issues.

[Screenshot: AI suggestions panel showing match suggestions with confidence scores]

Advanced Reconciliation View

The Advanced Reconciliation View provides a side-by-side split-panel layout that shows statement transactions on one side and your register transactions on the other. This is the most efficient way to reconcile when you have a parsed statement.

Opening the Advanced View

• Click Advanced View from the Simple View toolbar
• Or, when a PDF statement is attached, OtterLedger may open the Advanced View automatically

Layout

+----------------------------------+----------------------------------+
| STATEMENT (from bank)            | REGISTER (your records)          |
+----------------------------------+----------------------------------+
| Filter: [All v] Search: [____]  | Filter: [All v] Search: [____]  |
+----------------------------------+----------------------------------+
| Date   Description      Amount  | Date   Payee            Amount  |
| 01/03  PAYROLL DEP    +2500.00  | 01/03  Paycheck       +2500.00  |  <- Matched
| 01/05  ELEC CO PMT     -125.00  | 01/05  Electric Co.    -125.00  |  <- Matched
| 01/10  AMAZON.COM       -42.99  |                                  |  <- Missing from register
|                                  | 01/08  Cash withdrawal  -60.00  |  <- Missing from statement
| 01/15  CHECK #1234      -75.00  | 01/12  Check #1234     -75.00  |  <- Matched
+----------------------------------+----------------------------------+
| Matched: 12  Unmatched: 3       | Matched: 12  Outstanding: 2     |
+----------------------------------+----------------------------------+
| Statement Balance:  $2,543.67   Cleared Balance:  $2,543.67       |
| Difference: $0.00                                                  |
+----------------------------------+----------------------------------+

[Screenshot: Advanced Reconciliation View showing split-panel layout with matched transactions]

Unified Row Display

The Advanced View uses a unified row format where each row shows both the statement and register sides:

• Matched rows -- Both sides are populated and linked. Shown with a confidence indicator.
• Missing from register -- Statement has a transaction that is not in your register. A red "Missing" indicator appears on the register side.
• Missing from statement -- Your register has a transaction not on the statement. These are "outstanding" items (e.g., uncleared checks).

Manual Matching

If the automatic matcher missed a pair, you can manually match them:

1. Select a statement transaction on the left
2. Select the corresponding register transaction on the right
3. Click Match Selected

To unmatch a pair, right-click on a matched row and select Unmatch.

Handling Missing Transactions

Statement transaction not in your register:

1. Check the checkbox next to the missing row
2. Click Add Selected to create the transactions in your register (they are automatically matched and cleared)
3. Or click Add for Review to create them as pending transactions that you can review in the Banking view before clearing

Register transaction not on the statement:

1. These are "outstanding" items -- transactions you recorded but the bank has not processed yet
2. Check the checkbox and click Include to count them toward the cleared balance
3. Or leave them unchecked -- they will carry over to the next reconciliation

Filtering

Both panels support independent filtering:

You can also search by payee/description text in each panel independently.

Switching Between Views

• Click Simple View to return to the checklist-style reconciliation
• Your matches and selections are preserved when switching between views

Loan Account Reconciliation

Reconciling loan accounts (mortgages, auto loans, student loans) has special features to handle the principal, interest, and escrow components of each payment.

Principal/Interest/Escrow Breakdown

When you attach a loan statement PDF, OtterLedger extracts the P/I breakdown for each payment:

This breakdown is used for:

1. Auto-matching -- Loan-specific matching pairs statement payment components (e.g., FINANCECHARGE) with register interest transactions
2. Interest adjustment -- If your register interest amount does not match the statement, OtterLedger can auto-adjust it
3. Escrow 3-way matching -- Match escrow payments against the combined principal + interest + escrow from the statement

[Screenshot: Loan reconciliation showing P/I breakdown for a mortgage payment]

Loan Interest Auto-Adjustment

After transactions are loaded, OtterLedger checks whether the statement's finance charge matches your register's interest transaction. If there is a discrepancy:

1. The service automatically adjusts the interest amount to match the statement
2. A summary message explains what was adjusted (e.g., "Interest adjusted from $1,250.00 to $1,248.75")
3. Transactions are reloaded with the corrected amounts

Zero-Transaction Mortgage Support

Some mortgage accounts have no direct transactions because payments are made from a checking or escrow account. OtterLedger handles this by allowing reconciliation completion when the statement balance is zero and no transactions exist -- this covers origination periods and escrow-only accounts.

Completing Reconciliation

When the Difference is Zero

When the difference reaches $0.00, the Complete Reconciliation button becomes active.

1. Click Complete Reconciliation
2. Review the reconciliation summary showing:
   • Statement balance and cleared balance
   • Number of transactions reconciled
   • Any service charges or interest earned to be created
3. Confirm to finalize

[Screenshot: Reconciliation completion summary dialog]

What Happens When You Complete

• All cleared transactions change status to Reconciled
• Reconciled transactions are protected from accidental edits (editing triggers a warning)
• Service charge and interest earned transactions are created if entered
• The reconciliation record is saved to history
• Running balance is locked up to the reconciliation date

Saving Progress

You do not have to finish in one sitting:

• Save Progress -- Saves your current cleared selections. You stay in the reconciliation view.
• Finish Later -- Saves progress and exits. The account shows "In Progress" in the Reconciliation Center. Click Resume next time to pick up where you left off.

Generating a Report

After completing a reconciliation, you can save a report:

1. Click Save Report from the reconciliation toolbar
2. Choose a file location
3. The report includes the account name, statement date, balances, and a list of all cleared transactions

Reconciliation History

Viewing Past Reconciliations

1. Select an account in the Reconciliation Center
2. Click History
3. A list of all completed reconciliations appears, sorted by date

[Screenshot: Reconciliation history list showing completed reconciliations]

History Details

For each reconciliation record, you can see:

Actions on History Records

• View Transactions -- See all transactions that were part of this reconciliation
• Open Statement -- Open the attached PDF statement in your default viewer (if a statement was attached)
• Print -- Generate and print a reconciliation report (opens in your browser for printing/PDF export)
• Export -- Save the reconciliation data to a file
• Undo -- Revert the reconciliation (see below)

Undoing a Reconciliation

If you made an error:

1. Open History for the account
2. Select the reconciliation to undo
3. Click Undo Reconciliation
4. Confirm the action
5. All transactions revert from "Reconciled" to their previous status

Warning: Undoing a reconciliation cannot itself be undone. You will need to reconcile again. Only the most recent reconciliation for an account can be undone.

Reconciliation Reminders

OtterLedger tracks your reconciliation patterns and provides status indicators in the Reconciliation Center.

Status Indicators

How Predictions Work

OtterLedger analyzes your completed reconciliation history to detect your statement cycle:

• If you reconcile monthly around the 15th, it predicts the next 15th
• If you reconcile biweekly, it predicts accordingly
• Accounts with fewer than 2 completed reconciliations default to a monthly cycle

The predicted date is used for:

1. The status indicator in the Reconciliation Center
2. Pre-filling the statement date when you start a new reconciliation

Flip Signs (Liability Accounts)

Credit card, loan, and other liability accounts often use opposite sign conventions on their statements (charges shown as positive, payments as negative). OtterLedger handles this automatically:

Automatic Sign Handling

• When you start reconciling a liability account, NegateStatementAmounts is enabled by default
• All statement amounts are automatically inverted to match OtterLedger's convention
• You do not need to do anything -- it just works

Manual Flip Signs Button

If the automatic detection gets it wrong (or if you are working with an unusual statement format):

1. Click Flip Signs in the reconciliation toolbar
2. Both the statement balance and beginning balance are negated
3. Click again to flip back

Tip: If you find yourself flipping signs every time for a particular account, check the NegateStatementAmounts setting in the Start Reconciliation dialog. Toggling it there will save the preference for future reconciliations.

Tips and Best Practices

1. Attach the PDF statement. This is the single biggest time saver. AI parsing and matching can handle 80-90% of the work automatically.

2. Reconcile regularly. Monthly reconciliation for most accounts, or when each statement arrives. Small batches are much easier than catching up on 6 months.

3. Use the Advanced View for complex reconciliations. The side-by-side layout makes it easy to spot mismatches and missing transactions.

4. Check amounts carefully. Transposed digits ($54.00 vs $45.00) are a common source of discrepancies.

5. Enter service charges and interest directly. Rather than creating a separate transaction first, use the built-in fields in the reconciliation screen. OtterLedger creates the transactions for you on completion.

6. Investigate before creating adjustments. Adjustments should be a last resort. Always try to find the actual discrepancy first.

7. Keep your statement PDFs. OtterLedger stores them alongside the reconciliation record, so you can always go back and reference them from History.

8. Reconcile all account types. Checking, savings, credit cards, and loans all benefit from regular reconciliation.

9. Use Save Progress and Finish Later. There is no penalty for splitting a reconciliation across multiple sessions. Your work is saved.

10. For loan accounts, always attach the statement. The P/I breakdown extraction makes loan reconciliation significantly more accurate.

Troubleshooting

Q: The opening balance does not match my statement.

A: The opening balance comes from your last reconciliation's ending balance. If it is wrong:

1. Check if a reconciled transaction was modified after the last reconciliation
2. Verify the account opening balance is correct
3. You may need to undo the last reconciliation and redo it with the correct balance
4. For liability accounts, check whether the sign convention (NegateStatementAmounts) is set correctly

Q: My PDF statement did not parse correctly.

A: Some PDF formats are harder to parse than others. Try these steps:

1. Make sure the PDF is not password-protected or scanned (images are not supported)
2. Try downloading a CSV export from your bank instead -- CSV parsing is simpler and more reliable
3. Check that the PDF is a complete statement (not a partial download or screenshot)
4. If parsing extracts the wrong amounts or dates, you can still manually enter the statement balance and reconcile using the Simple View

Q: AI matching made incorrect matches.

A: You can correct any match:

1. In the Advanced View, unmatch the incorrect pair
2. Manually select the correct statement and register transactions and click Match Selected
3. In the Simple View, uncheck the incorrectly cleared transaction and check the correct one

Q: I have more transactions than the statement shows.

A: Some of your transactions may be:

• From after the statement date (outstanding)
• Pending and not yet processed by the bank
• Duplicates that should be deleted
• In the wrong account

Q: The statement has transactions I do not have.

A: You are missing transactions. In the Advanced View:

• Check the "Missing from register" rows and click Add Selected to create them
• Or add them manually via Add Transaction
• Check if they might be recorded in a different account

Q: I accidentally completed with the wrong transactions.

A: Go to History, select the reconciliation, and click Undo Reconciliation. Then start over.

Q: Can I reconcile multiple accounts at once?

A: No, reconcile one account at a time. This ensures accuracy and lets you focus on each account's transactions.

Q: The Difference shows a tiny amount like $0.01.

A: This can happen due to rounding in the bank's system. You have two options:

1. Create an adjustment for the penny (categorize as "Rounding" or "Bank Charges")
2. Check if any transaction amounts are off by a cent

What's Next?

With reconciliation mastered:

• Guide 11: QBO Migration -- Migrate from QuickBooks Online
• Guide 12: Business vs Personal -- Track business and personal finances
• Guide 26: Report Gallery -- Explore financial reports including reconciliation summaries

Need help? Visit the OtterLedger community at github.com/openledger or check the FAQ.