How to Fix AppFolio Bank Reconciliation Errors

Bank reconciliation errors in AppFolio are one of the most common — and stressful — problems property managers face. The good news: nearly every bank rec error has a root cause you can find and fix. Here's a systematic guide to doing exactly that.

What Causes Bank Rec Errors in AppFolio

Understanding the root causes saves you hours of guesswork. The most common culprits are:

• Duplicate entries — A payment entered twice, a deposit recorded manually after an eBatch import, or a vendor check posted both as a bill payment and a manual check
• Missing transactions — A check that cleared the bank but was never entered in AppFolio, or a deposit that appears in the bank but not in the system
• Incorrect beginning balance — If your first reconciliation was set up with a wrong starting balance, every reconciliation after it will carry that error forward
• Cleared vs. uncleared items — Items marked cleared that shouldn't be, or stale uncleared items from months or years ago still sitting on your rec
• Backdated or edited transactions — A transaction that was changed after a previous period was already reconciled, silently throwing off the current period

How to Use the Bank Reconciliation Diagnostic Report

The Bank Reconciliation Diagnostic Report is your first stop when something looks off. Here's how to access it:

1. 1Navigate to Accounting > Bank Accounts and open the account in question
2. 2Start or open the current reconciliation
3. 3In the Reports menu on the right side of the screen, click Bank Reconciliation Diagnostic
4. 4The report will download as a PDF

Scroll to the bottom of the report and look at the summary section. You'll see one of two results:

• In Balance — The discrepancy is in the current statement period. Proceed to review current-period transactions.
• Out of Balance — The problem exists in a prior period. You'll need to unreconcile and work backward.

If the diagnostic shows "Out of Balance," compare it against your most recently saved reconciliation report. If those numbers differ, someone may have backdated or edited a previously reconciled transaction.

How to Check for Stale or Incorrect Uncleared Items

Uncleared items are a silent killer in AppFolio reconciliations. Here's how to audit them:

1. 1On your bank reconciliation screen, look at the Outstanding Checks and Deposits in Transit sections
2. 2Sort by date and look for anything older than 90 days — these are almost certainly stale
3. 3For old uncleared checks: verify with your bank whether they ever cleared. If not, you may need to void the check and reissue, or void and post a journal entry to write it off
4. 4For old uncleared deposits: trace back to the original receipt and confirm whether the funds actually hit the bank. If they did, the item was likely cleared in the wrong period.

Important: Do not clear stale items just to make the numbers balance. Each one needs to be investigated and corrected at the source.

How to Correct Beginning Balance Issues

If your starting balance is wrong, all subsequent reconciliations will be off by the same amount. To fix it:

1. 1Run a General Ledger report for the specific bank's cash account going back to the first transaction ever entered
2. 2Find the opening balance journal entry — it's usually the first entry in the GL
3. 3Compare that amount against what your bank statement showed as the starting balance when you first set up AppFolio
4. 4If there's a discrepancy, contact AppFolio support to correct the starting bank account balance — this is one of the few corrections that requires support involvement
5. 5For property cash account balances, you can edit the beginning balance journal entry directly from the GL report

When to Void vs. Delete a Transaction

This is one of the most misunderstood distinctions in AppFolio:

• Void — Use when a transaction was legitimately entered but the underlying event didn't happen (e.g., a check was never cashed, a payment was returned). Voiding preserves the audit trail and keeps the original transaction visible in history.
• Delete — Use only for transactions entered in error that should never have existed. Deleting removes the transaction entirely and leaves no record.

Rule of thumb: If in doubt, void. You can always explain a void. A deleted transaction is gone forever.

For checks that have already cleared the bank, you cannot void — you'd need a reversing journal entry or a correcting entry instead.

How to Know When Your Rec Is Truly Clean

A clean reconciliation in AppFolio shows three matching numbers — the triple tie-out:

1. 1Bank Statement Ending Balance — what your bank statement says
2. 2Cleared Balance — the sum of all items you've marked as cleared in AppFolio
3. 3Adjusted Cash Balance — AppFolio's calculated figure based on your GL and uncleared items

When all three match and the Adjusted Cash Balance is shown in white (not red), your reconciliation is clean. Save the reconciliation and download the saved report for your records.

If the Adjusted Cash Balance is red, stop — do not save and move on. A red balance means something is wrong, and saving it will compound the issue into future periods.

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