reconciliation accounting definition

Reconciliation in accounting refers to the process of comparing and matching financial records from two sources to ensure accuracy and consistency. This typically involves verifying the internal financial records, such as a company's ledger, against external documents, such as bank statements or credit card reports. The goal of reconciliation is to identify discrepancies, correct errors, and ensure that all financial transactions are properly recorded. Regular reconciliation helps businesses maintain accurate financial records, ensures compliance with accounting standards, and prevents fraud or financial misstatements.