What is Bank Reconciliation?

Definition

Bank Reconciliation is the process of comparing and matching an organization’s internal accounting records with bank statements to ensure accuracy and consistency. It helps identify discrepancies, detect errors or fraud, and maintain proper cash management and financial reporting.

Key Features

• Automation: Leverages Bank Reconciliation Automation to reduce manual effort and improve efficiency in reconciling transactions.

• Account Mapping: Uses Chart of Accounts Mapping (Reconciliation) to align bank transactions with the correct general ledger accounts.

• Audit Readiness: Supports Reconciliation External Audit Readiness and ensures accurate records for compliance and financial reporting.

• Data Accuracy: Employs Data Reconciliation (System View) and Data Reconciliation (Migration View) to detect discrepancies and lower the Manual Intervention Rate (Reconciliation).

• Controls and Governance: Implements Segregation of Duties (Reconciliation), Bank Account Change Control, and Vendor Bank Change Control to prevent unauthorized activity.

• Continuous Monitoring: Enables Continuous Monitoring (Reconciliation) and Reconciliation Continuous Improvement for ongoing accuracy and process optimization.

Summary

Bank Reconciliation is the process of verifying internal records against bank statements to ensure accuracy, detect errors, and maintain compliance. With automation, proper mapping, segregation of duties, and continuous monitoring, organizations can achieve reliable financial reporting and strong cash management.