Bank Reconciliation
Also known as: bank rec, account reconciliation.
Definition
Bank reconciliation is the accounting process of matching the transactions on a bank statement to the entries in a general ledger or bookkeeping system, and resolving any differences. A reconciled period proves that ending balances agree, that no transactions are missing, and that no duplicates were posted. It is performed monthly for most businesses and is required for clean financial statements and audits.
Why it matters
Reconciliation catches data-entry errors, missing deposits, bank fees, and fraud before they compound. It is also the gate to closing the books each month. Slow or skipped reconciliations are the single most common source of bookkeeping debt in small businesses.
How DocuClipper handles it
DocuClipper extracts every transaction with the running balance and per-period totals, so the reconciliation can be checked automatically. See account reconciliation software.
Related terms
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