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In simple terms, balancing a cheque book means comparing your cheque book register with your bank statement to ensure that the balances are the same.

The reconciliation form on the back of the bank statement is for you to list the cheques and deposits that you have recorded in your personal cheque book register that are not listed on the bank statement. Your bank statement may also list ATM fees, bank fees, or other transactions that you were unaware of or forgot to include in your register. Balancing a cheque book also includes reviewing the transaction history to ensure there are no errors, no fraudulent charges, etc.

Besides having your own personal record of your transactions as a backup, maintaining your own cheque book register or using software like Quicken allows you to record checks when they are written and deposits when they are made as well as record when checks are voided, so that you can more accurately keep track of your available balance.

Knowing your available balance is very important to help you prevent bounced checks (and the fees and negativism that goes along with them) and avoid draws on your credit line. If you write a large check and it isn’t deposited for 3 months, you may forget about it and end up spending the money. If you only ever use online bill pay and your online account shows you the available balance, then you might be okay, but if you wrote out a physical check, it won’t show up online until it is cashed, and you have almost no control over when the person or business decides to cash the check.

Your personal check register allows you to not only record amounts, but also the description of the payee (e.g. Mom's Birthday Gift). Online banks often allow you to view scans of the cashed checks, but these systems are not error proof. I had a case where for a while the bank was not scanning my checks (or perhaps it was that the system for viewing the checks was temporarily down – I don't remember). Anyway, if the payees hadn't been listed in my checkbook register, I would have forgotten what they were for and it would have messed up my budget.

If you mail deposits, you need to record those deposits in your personal check register. If the deposit doesn't make it to the bank, it will never show up in your online account. Will you remember to check your account a week later to ensure that the deposit arrived?