reconciliation definition finance

Reconciliation definition in finance refers to the process of comparing two sets of financial records to ensure they are accurate and consistent. This process is essential for identifying discrepancies, correcting errors, and confirming that all transactions are recorded correctly. In accounting, reconciliation often involves matching a company’s internal records with external documents, such as bank statements, to ensure alignment. Regular reconciliation is vital for maintaining accurate financial data, supporting decision-making, and ensuring compliance with accounting standards.