Account reconciliation.
In plain English
Account reconciliation is checking your own record of an account against the bank's statement to make sure every transaction and the final balance match. You go line by line: each deposit, payment, and fee in your records should appear on the statement, and anything on the statement should be in your records. When the two totals do not agree, the gap points you to a missing transaction, a fee you forgot, or an error. People do this for personal checking and businesses do it for every account they hold.
01Why it matters
Reconciling catches double charges, forgotten subscriptions, and bank mistakes early, which protects you from overdrawing and from paying for things you never bought.
02The math, step by step
Your check register says you should have $830, but the statement shows $812. You compare line by line and find an $18 streaming charge you forgot to write down. The accounts now match at $812, and you know the difference was real spending, not a bank error.
03What this is NOT
Glancing at your balance tells you a number. Reconciliation is the line-by-line comparison that explains why that number is what it is and proves it is correct.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
Educational tool. Answers come only from ClearMoneySchool's published glossary and are not advice. Why we never give advice