What is a bank reconciliation?
It is the process of comparing the transactions and balances in your accounting records with your bank statement for the same period. Differences can occur because of timing, bank fees, automatic payments, errors, or transactions that have not yet cleared.
Regular reconciliation helps ensure that your books accurately reflect the activity in your bank account. Without it, small discrepancies can go unnoticed until they create larger reporting or compliance problems.
This page walks through the bank reconciliation process step by step, provides a practical bank reconciliation example, and explains what to do when your books and bank records do not match.
