UK Accounting Glossary
The reviewing and adjusting of the balance in a personal chequebook to match your bank statement.
Account reconciliation is a banking term referring to the process of confirming that the balance in one’s checkbook matches the balance on the bank statement itself. Account reconciliation may reveal that the amounts don’t correspond, which will require the account holder to perform subsequent adjustments. The importance of account reconciliation is that it helps the account holder keep track of the money, which could prevent expensive inefficient funds fees. There are several steps and precautions one can take when engaging in account reconciliation. Account reconciliation might entail keeping good records and carefully inspecting the bank statement itself. Account reconciliation can be used by both individuals and companies. In the business sense, account reconciliation is a method that can be used to help with cash management and help protect the business against fraudulent activities (such as the posting of unauthorized checks).
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This glossary post was last updated: 4th February 2020.