A bank reconciliation is the process of matching the cash balance in a business’s books against the balance reported by the bank. The two balances almost never agree because of timing differences — outstanding checks, deposits in transit, bank fees not yet recorded, and electronic transactions the business hasn’t logged. The reconciliation identifies each discrepancy and proves that both records, once adjusted, arrive at the same correct balance. It’s both an error-detection tool and a fraud-prevention control. Businesses typically reconcile every bank account monthly, immediately after receiving the bank statement.