Account balance vs. bank balance

Open any bank account in AccountFUN and you’ll see two balance figures:

Account Balance — your ledger balance.
Bank Balance — your statement balance.

They’re almost never the same number during a normal month, and that’s not a bug — it’s the whole reason bank reconciliation exists. This guide explains exactly what each balance means, why they diverge, and how to read the difference.

What each balance actually is

AccountFUN keeps two independent records of the same bank account, built from different sources:

Account Balance (your ledger)

The running total of every journal entry you’ve posted to this account — invoice and bill payments, Spend/Receive Money, transfers, manual journals and opening balances. It’s the accounting view: “according to your books, this account is worth X.” This is the number your reports, profit figures, and Balance Sheet use.

Bank Balance (your statement)

Your ledger opening balance plus the sum of every line your bank has reported via a bank feed or imported statement (Plaid feed, CSV upload, or spreadsheet feed). It’s the statement view based on the data AccountFUN has imported. It matches your bank’s statement only when the opening balance and imported lines cover the same period; use your bank’s own app for its current available balance.

Account Balance  =  Σ (all posted journal-entry lines on the account)
Bank Balance     =  opening balance  +  Σ (all imported, non-deleted statement lines)

The two records start disconnected and stay disconnected until you explicitly pair them up. That pairing — done line by line — is reconciliation.

Why they don’t match: it’s all about timing

The two balances diverge whenever a transaction exists in one record but not the other. There are two directions this can go, plus a couple of setup edge cases. Let’s take each with an example.

Case 1 — The bank knows before you do

(Bank Balance changes; Account Balance doesn’t yet)

A transaction lands on your bank statement before you’ve recorded it in your books. Your Bank Balance moves; your Account Balance is unchanged.

Example: A customer pays an invoice by direct deposit. The $500 hits your bank and shows on an imported statement line — your Bank Balance rises by $500. But you haven’t matched that deposit to the invoice yet, so your Account Balance doesn’t move until you do.

Other examples: a debit-card coffee, a bank service fee, interest paid, a standing-order subscription — anything that appears on the statement before you’ve coded it.

In this case Bank Balance > Account Balance (for money in) or Bank Balance < Account Balance (for money out). The commonest cause of a gap during the month.

Case 2 — You know before the bank does

(Account Balance changes; Bank Balance doesn’t yet)

You record a transaction in your books before it appears on the bank statement. Your Account Balance moves; your Bank Balance is unchanged.

Example: You write a cheque for $1,200 rent and enter it as Spend Money today. Your Account Balance drops by $1,200 immediately. But the landlord doesn’t deposit the cheque for a week, so it won’t appear on an imported statement until then — your Bank Balance stays put until that line imports.

Other examples: a payment you recorded that hasn’t cleared yet, a Transfer Money entered before the funds moved, a Spend Money typed in ahead of the statement arriving.

This is the classic “outstanding cheque / deposit in transit” situation. Here Account Balance reflects reality; Bank Balance lags.

Case 3 — The opening balance

(Both start from a chosen starting point)

When you set up an account (or migrate from another system), you give it an opening balance — the amount the account was worth on day one. That opening balance is the shared starting point for both figures. If you set it wrong, or set it in one record but not the other, the two balances will be permanently offset by that error until you correct it.

Example: You start using AccountFUN mid-year. You set the opening balance to $5,000 but your real bank balance that day was $5,230. Every figure from then on is off by $230 until you fix the opening balance.

Case 4 — Deleted or duplicate statement lines

If a statement line was imported twice and you deleted the duplicate, or you removed a line imported in error, it no longer counts toward the Bank Balance (deleted lines are excluded from the sum). This is normal cleanup, but it’s a place to look if a number seems off.

A worked example: watching the gap open and close

Your Business Checking starts July fully reconciled, so Account Balance = Bank Balance = $10,000.

Date	Event	Account Balance	Bank Balance
Jul 1	(start, reconciled)	$10,000	$10,000
Jul 3	Customer pays $1,200 — appears on statement, not yet matched	$10,000	$11,200
Jul 5	You write a $300 cheque (Spend Money), not cleared yet	$9,700	$11,200
Jul 8	You match the $1,200 deposit to invoice INV-0014	$10,900	$11,200
Jul 10	The $300 cheque clears and imports as a statement line; you match it	$10,900	$10,900

Notice how the gap opens on Jul 3 (bank knows first), widens on Jul 5 (you know first), then closes as you reconcile each line. By Jul 10 every statement line has a matching ledger entry and vice versa — the balances agree, the badge reads Reconciled, and you can trust the number.

What it means when they DO match

Matching totals are a useful check, but they do not prove that every transaction has been matched or coded correctly. Unmatched amounts can cancel each other out, and an incorrect expense category can leave the bank total unchanged.

Review both the Unreconciled count and the individual matches, check that your opening balance and imported statements are complete, and explain ledger entries that have not cleared the bank. The badge counts unmatched statement lines; it does not count unmatched ledger entries or certify your expense coding.

Which number should you trust?

People often ask “how much money do I actually have?” — and the answer depends on what you need:

“What can I spend right now?” → check your real bank’s available balance. AccountFUN’s Bank Balance reflects imported statement data.
“What do my books say, for reports and tax?” → use the Account Balance. It’s what your financial statements are built on.
“Are my books trustworthy?” → neither number alone — it’s the gap between them being explained, supported by complete statements and correct line-by-line matches, that matters.

How to close the gap

Reconcile. Open the account’s Reconciliation tab and clear each statement line by Matching, Find & Match-ing, Create-ing, or Transfer-ring it, until the badge reads green. The full step-by-step (with a worked month) is in the Bank reconciliation guide.

A few habits keep the gap small:

Reconcile weekly so items never pile up and you still remember what each transaction was.
Record entries as they happen (Spend Money, payments) so your Account Balance stays current — don’t wait for the statement to drive everything.
Investigate persistent gaps. If the two balances refuse to converge after reconciling, the usual suspects are a wrong opening balance, a deleted statement line, or a duplicated entry. Drill into the Account Transactions and Bank Statements tabs to find it.

A note on multi-currency accounts

For a foreign-currency bank account (e.g. a EUR account on USD books), the Bank Balance and the account page’s Account Balance are both shown in the bank’s own currency. Ledger lines also retain their base-currency accounting amounts; the account page derives native values using each line’s recorded rate. A change in today’s FX rate alone does not create a gap between these two native-currency figures. Base-currency financial reports apply their own closing-rate revaluation. See Multi-currency and FX gains & losses for that layer.

The takeaway

Two records, two balances — ledger vs. statement — kept separate on purpose.
They diverge on timing: the bank knows before you, or you know before the bank.
A gap needs explaining; the “Unreconciled” badge counts unmatched statement lines, not the monetary size of the gap.
Check the matches as well as the totals — equal balances alone do not prove the books are complete or correctly coded.