2 min read
Definition
A bank reconciliation is the process of matching a business's own cash records to its bank statement, identifying any differences — uncleared payments, unrecorded charges, errors — so the two agree. It is a basic control that keeps your cash figures trustworthy.
In plain terms
Timing differences (a cheque not yet cleared) and omissions (a bank fee not yet booked) cause the two to diverge. Reconciling regularly catches errors, fraud and forgotten transactions before they distort your view of cash.
Why it matters
You cannot manage cash you cannot measure accurately, and reconciliation is what keeps the measurement honest. See how to reconcile your bank account.
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