Can You Bank On The Amount Available In Your Bank Account?

Question: Is the bank balance shown on your online banking the actual amount available?

A friend of mine ran into this problem at Bank of America. I totally feel for her and for my bookkeeping clients whose balances were not exactly what the bank says.  Even though the banks offer "real time" bank balances, it is actually not true. The problem is since transactions posted in the afternoon (i.e. deposits) usually don't appear until the next day whereas debit card transactions at a store, restaurant are immediate no matter what time of day.  That's why bank reconciliations are still important.

Online banking sites use the terminology "pending transactions", "uncollected amounts" and "amount available" but what does it really mean?  As much as I love online banking and personal finance sites, you have to remember that the more frequently that you have automatic debits and credits to your bank account, the more you have to  be vigilant of what you actually spend. Make sure you have overdraft protection to protect your funds just in case.