Reconciliation

Matching two records of the same activity to confirm agreement.

Definition

Reconciliation compares an internal record, such as the ledger, against an independent one, such as a bank statement, and investigates every difference until it is explained.

Why it matters

Unreconciled accounts make every downstream number unreliable. A reconciliation that is 'nearly there' is a reconciliation that has not been done.

Related terms

• internal controls
• anomaly detection
• accounts receivable