Definition
Reconciliation is the boring, essential discipline that keeps a set of books trustworthy. Each month, every cash, credit-card, and loan account should be reconciled to the corresponding statement. Unreconciled accounts are the single most common cause of bad financial reporting.
When It Matters
Every month. If accounts aren't reconciled, no financial report from those accounts is reliable.
Common Questions
How often should accounts be reconciled?
Monthly, at minimum. Daily is reasonable for high-volume operating accounts.
Related Services
R · Related Terms
Accounts Receivable (AR)
Money owed to your business by customers for goods or services already delivered.
Accounts Payable (AP)
Money your business owes to vendors and suppliers for goods or services already received.
Balance Sheet
A snapshot at a single point in time of what a business owns (assets), owes (liabilities), and the owners' equity in it.