# Client Switched Banks? Bookkeeping for the Changeover

- Author: AutoBankConvert (https://www.autobankconvert.com)
- Published: 2025-11-23
- Updated: 2025-11-23
- Category: Bookkeeping workflows
- Canonical: https://www.autobankconvert.com/blog/client-switched-banks-bookkeeping

> Client switched banks mid-year? Bookkeeping steps for the overlap month: final and first statements, the moving transfer, new rules and the old account.
When a client switched banks, the bookkeeping needs a new bank account in the books, the old account's final statement and the new account's first one, the moving transfer recorded as a transfer rather than income, and updated rules. Keep the old account open in the books until its balance is zero and nothing still clears through it.

## What changes in the books when a client switched banks?

When a client switched banks, the books gain a new bank account and eventually lose an old one, and every routine tied to the old account has to move. The chart of accounts, the statement collection list, the categorization rules and any bank feed all change. The client's income and expenses do not change at all.

That last point is the one to protect. A bank switch is a change in where money sits, not in what the business earned or spent. If the profit and loss for the changeover month looks different from the months around it, something in the switch was miscoded. Start by adding the new account to the chart of accounts with its own name and last four digits, and update the client's written procedures with the new account, its statement cycle and how statements will reach you. The [client bookkeeping procedures document](/blog/client-bookkeeping-procedures-document) is where those details live.

## Final and first statements in the bank changeover month

The bank changeover month needs two statements that overlap: the old account's last full statement, or its final statement if it closes, and the new account's first statement. Both cover the weeks when money is moving, payments are switching over and deposits may land in either account. Neither statement alone tells the whole story.

Ask the client for both as soon as each one is issued. The new account's first statement usually opens at zero or with the initial deposit, so it has no prior month to anchor to. Its opening balance comes from the statement itself. The old account's statements continue until its balance reaches zero. Do not stop collecting them because the client says they "moved everything", since a stray direct debit or a late deposit can still land there.

## Recording the moving transfer between old and new bank accounts

The moving transfer is the payment that takes the balance from the old account to the new one, and it is recorded as a transfer between two bank accounts on the balance sheet. It is never income on the new account or an expense on the old one. Each statement shows one side of it.

### A worked example

The figures are an example. Before the move, the old account holds 24,300.00. On April 18 the client moves 24,000.00 to the new account and leaves 300.00 behind for stragglers.

| Date | Old account statement | New account statement | Entry in the books |
| --- | --- | --- | --- |
| Apr 18 | Withdrawal 24,000.00 | Deposit 24,000.00 | One transfer: old bank to new bank |
| Apr 25 | Phone bill autopay 120.00 | | Expense, as usual |
| Apr 30 | Closing balance 180.00 | Closing balance 24,000.00 plus April activity | Both accounts reconciled |

When both statements are imported or converted, the 24,000.00 appears twice: once as a withdrawal and once as a deposit. Match them into a single transfer. If each side is coded on its own, you get a 24,000.00 expense and a 24,000.00 income line that cancel in profit but distort both totals.

### The changeover steps

1. Add the new bank account to the chart of accounts.
2. Collect the old account's last statements and the new account's first one.
3. Convert or import both and reconcile each to its own closing balance.
4. Match the moving transfer into one entry between the two accounts.
5. Update rules and any feed for the new account.
6. Keep reconciling the old account monthly until it is zero and closed.

## Which categorization rules break after a bank switch?

Categorization rules can break after a bank switch because the new bank may print a payee differently. Rules written to match description text from the old bank may not match the new bank's wording, and rules tied to a specific account will not run on the new one at all. Expect more manual coding in the first month or two.

Review the first month's uncategorized lines closely. For each recurring payee, write or update a rule against the new bank's description. Watch for automatic payments that the client has not moved yet: they will keep appearing on the old statement until they are switched. Cash-heavy clients face one more change, because their deposit routine moves to a new branch and a new deposit slip format, and the matching of takings to deposits needs a fresh check, as [bookkeeping for cash businesses](/blog/bookkeeping-for-cash-businesses) explains. If you automate this client's monthly flow, the new account is a good moment to review it end to end, using [how to automate bookkeeping](/blog/how-to-automate-bookkeeping) as the order to follow.

## When should the old bank account be closed in the books?

The old bank account should be closed in the books only after its balance is zero on a bank statement and no transactions have cleared for at least one full statement cycle. Closing it earlier risks losing a late deposit, an uncashed check or an automatic payment the client forgot to move.

Mark the account inactive in the accounting software rather than deleting it, so its history stays visible. Keep its final statement, which proves where the last of the balance went. The steps for posting that statement and bringing the ledger to zero are in [closed bank account bookkeeping](/blog/closed-bank-account-bookkeeping). If you later hand the client to another bookkeeper, note the switch in the handover file. The [guide to taking over books from another bookkeeper](/blog/taking-over-books-from-another-bookkeeper) shows why an unexplained closed account is one of the first things a new bookkeeper chases.

A bank switch also means statements from two layouts in the same month. [AutoBankConvert](/) reads each statement's layout rather than relying on a fixed list of banks, and checks each one's balances, so the old and new statements can go through in the same batch.