# Bank Reconciliation

*Accounting & Reporting — Finicade finance glossary*

A bank reconciliation matches your ledger's cash balance to the bank statement, explaining every difference — outstanding cheques, deposits in transit, fees. It's the most basic internal control there is, and performing it independently of whoever handles payments is what makes it a control rather than a formality. A large share of small-business embezzlement is found here, or would have been.

**Also known as:** reconciling the bank, bank rec

**Related terms:** [General Ledger](https://finicade.com/glossary/general-ledger), [Internal Controls](https://finicade.com/glossary/internal-controls), [Cash Flow](https://finicade.com/glossary/cash-flow), [Journal Entry](https://finicade.com/glossary/journal-entry), [Audit](https://finicade.com/glossary/audit)

Source: https://finicade.com/glossary/bank-reconciliation