Bank Reconciliation

A bank reconciliation is a process performed by a company to ensure that its records (check book, general ledger account, balance sheet, etc.) are correct. This is done by comparing the company's recorded amounts with the amounts shown on the bank statement. Any differences must be justified. When there are no unexplained differences, accountants state that the bank statement has been reconciled.

The bank reconciliation is an important part of a company's internal controls over its assets. To be effective, it should be done by someone other than an authorized check signer and/or record keeper.