reconciliation definition in accounting

Reconciliation in accounting refers to the process of comparing and matching financial records, such as bank statements, accounts, or transactions, to ensure they are accurate and consistent. It is an essential procedure in financial accounting that helps identify discrepancies, errors, or fraud. Bank reconciliation, account reconciliation, and trial balance reconciliation are common types used by businesses to confirm that their financial statements align with actual transactions. Proper reconciliation ensures the integrity of financial reporting, aids in audit compliance, and supports effective cash flow management. Regular reconciliation helps accountants and businesses maintain accurate books, reduce financial risks, and make informed business decisions.