What is reconciliation?

Reconciliation is the process of comparing financial records with an external source, such as a bank statement, to confirm that transactions and balances match. Reconciliation helps ensure that financial records are complete, accurate, and ready for reporting.

Example: An accountant compares the transactions recorded in the ledger with the monthly bank statement and investigates any missing or unmatched items.

Related terms: Month-End Close, Continuous Close, General Ledger, Financial Statements