Month End Glossary

Reconciliation

Reconciliation involves ensuring that two financial records match, which is vital for accurate accounting and financial reporting.

Reconciliation in financial terms refers to the process of ensuring that two sets of financial records or accounts are consistent and in agreement. This helps verify the accuracy and completeness of recorded transactions. For example, a company may reconcile their bank statements with their internal accounting records to ensure all transactions have been recorded correctly. Reconciliation is a critical step in financial processes, as it helps identify and resolve any discrepancies or errors. Common areas for reconciliation include bank reconciliations, intercompany transactions, and reconciling general ledger accounts with subledgers. Regular reconciliations contribute to the overall internal control framework and assist in accurate financial reporting, ensuring all data is reliable and up to date. Tools like Easy Month End can simplify and streamline the reconciliation process, ensuring thorough checks while reducing manual effort. A reconciliation checklist might include reviewing transaction details, comparing data sources, and documenting adjustments made to align the records. This term is commonly utilized in business language, e.g., "We completed the reconciliation of our bank accounts to ensure all deposits and withdrawals were accurately recorded."

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