Bank reconciliation and checking off transactions

What is a bank reconciliation?

A bank reconciliation, also called "checking off an account", is used to check and validate your accounts so as to detect and prevent any error or discrepancy with reality.

A reconciliation consists of checking off each transaction in your accounts using a bank statement provided by your bank: the statement reflects the transactions that actually took place and therefore lets you check that each of them exists in your own accounts (same amount, same payee, and so on).

So, at the start of each month, when you receive your bank statement, you reconcile your accounts: once the transactions have been checked off and the reconciliation is complete, they can no longer be changed.

What are the benefits of bank reconciliation?

Bank reconciliation, or checking off transactions, offers many benefits for your accounts:

• There is no discrepancy between your accounts and reality.
• Any error or omission is systematically detected.
• You can keep "provision entries" (to plan for future expenses) in your accounts while still checking them against your bank account. These provision entries are never checked off and do not interfere with reconciliations.
• Once a transaction has been checked off, and therefore reconciled, it can no longer be changed or deleted: your past transactions are validated and immutable, which removes any risk of an accidental change.

How do I reconcile a bank account?

To learn how to carry out or cancel a bank reconciliation, see our help page How to check off or reconcile a bank account.