Accounting
Reconciliation
Comparing your accounting records against an outside source — usually a bank or credit-card statement — to confirm they agree.
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.