What is bank account reconciliation

Bank account reconciliation is the process of comparing your internal financial records, such as a cash book, with your official bank statement to ensure all transactions match. This practice helps identify discrepancies caused by:

• Timing differences, like checks issued but not yet presented for payment
• Unrecorded bank charges or interest credits
• Errors in entry by the individual or the bank

Regular reconciliation ensures financial accuracy, helps track cash flow, and aids in the early detection of unauthorized transactions or fraud.