Record to report / R2R – Reconciliations


Bank reconciliations are a mapping between the set of transactions of your bank account, as maintained by you and by your bankers.

This form of reconciliation is the most traditional reconciliation and most widely practiced as well. When we studied accounting in our school / college, this was probably the only form of reconciliation taught to us, and we used to get really confused what items to reduce and what items to add to the starting balance.

Now, depending on the size of the business and its spread, there would be one to many bank accounts. In the digitized world, most of the banks now send digital statements. For larger businesses, banks also agree to send data feeds and some of the ERPs do benefit from these. You have the ERPs / accounting systems configured to take these inputs and automatically map / throw out the differences. But does that ensure a 100% mapping in an automated manner? The clear answer is no. Your accountant could have passed a single entry for multiple similar transactions, which would reflect differently in the bank statement, there would be charges and interest components missing from your accounting records and a lot more. There will always be some entries which will need a manual intervention.

Next post, I will cover the basic reconciliation, as to what gets added and what gets reduced and then come back to the bank reconciliations post that.



Have you been following our accounting blog?


Subscription and Guest Post:

You may subscribe to the blog from the subscription box on the opening page of the blog. We have enabled a button on the top of the first page, which will enable you share your posts. If you wish to write about any of the current streams, you can do it at We will review your post and release it within 48 hours of your posting. Please note, any irrelevant posts shall be deleted without information.