What is Bank Reconciliation?
Bank reconciliation is the process of matching and verifying transactions between a company’s internal financial records and bank statements to ensure accuracy.
This critical accounting procedure identifies discrepancies such as outstanding checks, deposits in transit, bank fees, or recording errors. Regular bank reconciliation helps detect fraud, prevent cash flow problems, and maintain accurate financial statements.
Modern accounting software automates much of this process by importing bank transactions and using algorithms to match entries, significantly reducing manual effort. Timely bank reconciliation is essential for financial integrity, audit compliance, and informed business decision-making.
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