Account Reconciliation
The process of verifying that a specific financial account's balance in the general ledger matches the corresponding external statement (bank, credit card, or vendor) for a given period.
Key Details
- Account reconciliation compares internal account balances against external statements or counterparty records to ensure accuracy
- Common types include bank reconciliation, intercompany reconciliation, credit card reconciliation, and vendor statement reconciliation
- The reconciliation process identifies timing differences (transactions recorded in different periods), errors (incorrect amounts or mispostings), and fraudulent or unauthorized transactions
- Regulatory requirements such as SOX and SOC 2 mandate regular account reconciliation with documented evidence of review and resolution
- Automation reduces reconciliation from days to hours by eliminating manual spreadsheet matching and providing real-time exception visibility