Accounting Terms

Bank Reconciliation

Definition

The process of matching your accounting records with your bank statements.

Overview

Reconciliation ensures your records match reality. It identifies discrepancies, missing transactions, and errors. Regular reconciliation is essential for accurate books.

Example

Monthly bank reconciliation reveals a $200 charge not recorded in the books—an annual software renewal.

Best Practices

Reconcile monthly at minimum. Investigate and resolve all discrepancies promptly.

Common Mistakes to Avoid

Infrequent reconciliation

Ignoring discrepancies

Not investigating differences

Related Terms

Frequently Asked Questions

How often should I reconcile?

Monthly at minimum. Weekly for businesses with many transactions.

Ready to Create Professional Invoices?

Put your invoicing knowledge to work with Popied's easy-to-use platform