Account reconciliation (kontoafstemning)
Also known as reconciliation, bank reconciliation, balance reconciliation
Account reconciliation is the check that the sales ledger and the bank account show the same thing — and that every difference can be explained.
- Compares
- Ledger and bank account
- Typical frequency
- Monthly
- Reveals
- Posting errors and unmatched payments
In practice
Reconciliation is the exercise that decides whether the figures in the sales ledger are usable at all. If the ledger shows 1.4 million outstanding and the bank cannot confirm the movements behind it, the figure is not wrong — it is simply worthless as a basis for decisions.
In practice reconciliation finds three kinds of error. Payments that arrived without being matched. Invoices posted twice. And credit notes raised in one system and not the other.
The longer the gap between reconciliations, the more expensive they get. A month of differences can be worked through. A year of them cannot.
Where it commonly goes wrong
- Reconciliation is postponed when things get busy. Those are exactly the periods with the most postings, and therefore the most errors.
- The difference is written off rather than explained. A posting that closes a gap without anyone knowing why simply moves the problem into the accounts.