Reconciliation is the process of matching your accounting records against an external source, such as a bank statement, to confirm they agree and catch errors.
The most common form is bank reconciliation: comparing the cash balance in your books to the bank statement and explaining every difference, outstanding cheques, deposits in transit, bank fees, until the two agree. Done monthly, it catches missing transactions, duplicates and errors before they compound.
Reconciliation is a cornerstone of reliable bookkeeping and a key control the CRA expects to see. Unreconciled books are a red flag in a review, because they mean the reported numbers are not verified against reality. The same discipline applies to credit cards, loans and the GST/HST accounts.
Your books show $10,000 in the bank but the statement shows $9,600. Reconciliation reveals a $400 cheque you wrote has not yet cleared, so the records are correct and simply timing-different, no error.
Our certified accounting firm handles this for businesses and individuals across Canada, at fixed fees with no surprises.
Book a Free 15-Minute CallCommon questions regarding our compliance workflows and service guarantees.