Explained
Three differences are usual: cheques written in the books but not yet presented, deposits recorded but not yet cleared, and bank charges on the statement that never reached the books. A reconciliation is not a button that makes two numbers equal — a difference is a result to be explained, and anything left unexplained is something to go and find.
Related terms
- Cash flowCash flow is the money that actually came in and went out over a period — which is not the same thing as profit.
- Journal entryA journal entry records one transaction in the books as equal debit and credit sides, with a date, a description and a reference.
- Period closeClosing a period stops new entries being dated into a month or year that has finished and been reviewed.