Glossary

Reconciliation

Reconciliation is checking that two records agree — typically your accounts against your bank — so errors, fraud and timing gaps surface fast.

2 min read

Match two recordsLedger vs bank

Catches errorsMonthly minimum

Definition

Reconciliation compares your internal records to an external source — most commonly a bank reconciliation matching your cashbook to the bank statement — and investigates any difference.

In plain terms

It is the safety check that your books reflect reality. Unreconciled accounts hide double payments, missed income and, occasionally, fraud.

Why it matters for your company

Lenders expect reconciled management accounts. Regular reconciliation is also the earliest place a cash flow problem shows up. See how to read management accounts.