Reconciliation
1. Cash management and accounting.
A reconciliation is any quantified explanation of the differences between two related amounts.
Reconciliation checks are an important feature of internal control systems, to provide additional assurance about the completeness and accuracy of recording financial and other information.
A very important example is the reconciliation of bank statement balances with the amounts in the customer organisation's internal records.
Another common accounting example is the reconciliation of reported operating profit to net operating cash flows.
This statement explains why the figure for accounting profit differs from the net operating cash flows for the same period.
Each item contributing to the net difference is quantified within the reconciliation statement.
Another example is the comparison of a physical count of stock or other assets, compared with the amounts in financial or other records.
2. Financial reporting - financial management.
An example of a reconciliation is a quantified explanation of the change in any balance, over a time period.
Sometimes abbreviated to 'rec'.
3. Dispute resolution.
Restoration of friendly relations between parties, for example following the resolution of a dispute.
