What is Account Reconciliation: Process, Example and Types
Account reconciliation is an important accounting process as the entries in the general ledger may not always be accurate. For instance, when you receive a check from a customer, you may have recorded it as paid. The reconciliation process involves comparing internal financial records with external documents to identify and correct discrepancies. This includes investigating any differences, making necessary adjustments, and documenting the process for accuracy. Finally, the reconciliation is reviewed and approved to ensure the financial records are accurate and complete. A three-way reconciliation is a specific accounting process used by law firms to check that the firm’s internal trust ledgers line up with individual client trust ledgers and trust bank statements. Make a list of all transactions in the bank statement that are not supported, i.e., a step-by-step…