Bank Reconciliation

Overview

Context and purpose

It identifies timing differences, fees, interest, returned payments, deposits in transit, outstanding items, duplicates, omissions, and unauthorized activity. The operating record should identify the source population, counterpart data, matching rule, cutoff, amount or value, tolerance, exception reason, owner, and resolution evidence. Bank Reconciliation should remain distinct from Reconciliation and Reconciliation Exception , because each can represent a different stage, record, control, or financial outcome. The failure model should include misidentified owners, excessive authority, stale balances, wrong currencies, duplicate postings, cutoff mismatches, unmapped fees, unsupported exports, unresolved suspense items, and reconciliation that hides rather than explains differences. Important failure modes include missing records, duplicate matches, timing differences, hidden fees, currency mismatches, stale files, and adjustments that force balances to agree without explaining the cause. Controls should keep original source records immutable, use stable match keys, explain many-to-one or one-to-many relationships, and route unresolved differences to an aged exception queue.

How it works

Bank reconciliation compares the bank’s independently reported movements with the organization’s cash account records. Differences may stem from timing, bank charges, failed transfers, currency conversions or missing postings.

Practical checks and failure points

Match by reference, value date, amount and currency; investigate suspense items instead of forcing totals to agree.

Related concepts

Ledger Reconciliation · Fiat Settlement