Definition
Reconciliation is the process of matching payments received in your bank account to the invoices they settle, and confirming that your invoicing records agree with your bank records. Regular reconciliation catches missing payments, duplicate payments, short-payments, and unreferenced transfers.
Also called: Payment reconciliation, Bank reconciliation
Reconciliation in practice
Reconciliation is faster when clients use the invoice number as their payment reference and when each invoice is marked paid in your invoicing tool as soon as money arrives.
Frequently Asked Questions
How often should I reconcile invoices?
Weekly for most small businesses, daily if you issue many invoices. Monthly at minimum, before closing the books.