Cash & Nostro Reconciliation
Reconcile an internal cash ledger to a nostro statement, classify the breaks and prove the result against a control total.
The scenario
You're on the reconciliations desk. Today's internal cash ledger and the nostro (bank) statement for one account do not tie out. Reconcile them: match the cash movements, classify the breaks, apply a sensible tolerance, and tell the desk exactly what to chase first.
Where this shows up
Cash and nostro reconciliation is a daily back-office function and a staple operations assessment at firms of this type.
Firms such as State Street, BNY, HSBC.
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Task brief
# Cash & Nostro Reconciliation **Role relevance:** Reconciliations / middle office take-home **Estimated time:** 50 minutes **Difficulty:** Intermediate **Format:** Excel (.xlsx) ## What you are given - cash_nostro_reconciliation_starter.xlsx with an internal ledger and a nostro statement that do not tie out - A stated 2.00 matching tolerance and both opening balances ## What you must deliver 1. A matched item list with a difference per reference 2. A cash-specific classification for every break 3. A control total that ties the net unreconciled figure to the balance difference 4. The item you would chase first, with a reason ## Constraints & assumptions Match on reference then amount, within tolerance. Use an outer match so one-sided items stay visible. The net unreconciled total must equal the balance difference - do not plug it. ## Submission note Complete the starter file, then compare your work against the mark scheme.
Your tasks
- 01Match internal cash movements to nostro entries on reference and amount, within a stated tolerance.
- 02Classify unmatched items: missing at the bank, missing internally, a value-date break, or a fee/interest difference.
- 03Total the net unreconciled cash and confirm it equals the statement-to-ledger balance difference.
- 04Identify the item you would chase first and say why.
How you're assessed
The full points-based mark scheme is included with the pack.
What you'll learn
- How cash and nostro reconciliation differs from securities reconciliation.
- The cash-specific break types: value-date, fee/interest, FX and unmatched.
- Why a tolerance stops small fee and rounding differences becoming false breaks.