The four checks worth running on a bank statement before you post it

The expensive mistakes in a bank statement are rarely misread digits — a balance chain catches those. They are the payment large enough to need TDS that nobody deducted on, and the invoice paid twice in March that surfaces during the audit in October.

Why the important rows hide

A three-hundred row statement is mostly noise: UPI payments of a few hundred rupees, standing instructions, card spends. The four rows that matter look exactly like the other two hundred and ninety-six when you are scrolling. Nobody misses them through carelessness; they are missed because there is no visual difference between them and everything else.

The fix is not more care. It is arithmetic, applied once, at the moment the statement is converted — before it becomes a Tally voucher and considerably before it becomes an assessment.

1. Payments above the TDS threshold

Section 194C is the one most commonly cited for contractor payments, with a single-payment figure of ₹30,000 that most practices watch. Any single debit at or above that is worth a look before posting — not because TDS necessarily applies, but because it might, and the check costs seconds now against a lot later.

2. Aggregates to one payee

The single-payment threshold is the easy one. The harder pattern is four payments of ₹28,000 to the same party across a year — each one under the limit, the total well over the aggregate figure of ₹1,00,000 that practices commonly track.

This cannot be spotted by scanning, because the rows are months apart. It needs the payee to be extracted from each narration and the amounts totalled. Bank narrations make that awkward — UPIAR/321216098504/DR/SURYA TU/PYTM/paytmqr2810050 contains a name and a great deal of noise — so any aggregate you compute this way is a strong hint rather than a certainty. Treat it as a prompt to check, not a finding.

3. The same amount paid twice

The same amount, to the same payee, on the same date. Sometimes it is genuine — two invoices settled separately. Often it is a payment made twice because someone did not see the first one go through.

This is the cheapest check on the list and the one with the fastest payback, because a duplicate payment found during conversion is recoverable and one found eight months later usually is not.

4. Cash near a statutory limit

Two figures are worth watching on the cash rows. Cash payments above ₹10,000 in a day are commonly treated as disallowable under section 40A(3), and cash deposits at or above ₹50,000 generally require PAN to be quoted.

Neither is a verdict — both have exceptions, and thresholds move with each Finance Act. But a cash row above either figure is one you want to have consciously looked at rather than scrolled past.

Flag, do not rule

Whatever tool you use for this — including ours — be suspicious of one that states a conclusion. Whether TDS applies depends on the payee’s status, the section, the year’s thresholds and facts that are simply not in a bank statement. Software that says “TDS applies” is guessing with your signature on it.

“This payment is ₹87,500 — review it” is useful and honest. The judgement stays with the professional, which is where the liability sits anyway.

BankXL runs all four checks on every conversion and puts anything it finds on a Review sheet in the Excel file. See how the pre-flight audit works, or read about automating reconciliation for CA firms. Questions: support@banlxlai.com.