What Are Bank Reconciliations?


Bank reconciliations verify the integrity of data between bank records and a company’s internal financial records. The process begins with the comparison of balances between bank statements and the associated transactions within various accounts in a company’s chart of accounts.

This is a necessary step to ensure that bank account balances are correct and accurate. When discrepancies are found, they are investigated by accountants and corrective action is taken.

What is the Process for Bank Reconciliations?

The bank reconciliation process is carried out when bank statements are received, or after the close of a financial period. Accountants go through each bank statement or file and match the transactions with the company’s internal systems. When discrepancies are found, investigation is performed to determine the appropriate corrective action.

Corrective action may involve disputing transactions with the bank, making journal entries to correct timing items/errors, or other actions to address account balance differences. All research performed, information found, and actions taken are stored for audit purposes.

The bank reconciliation process must be completed before a company can certify the integrity of its financial information.

How Does Bank Reconciliation Software Work?

Bank reconciliation software automates all of the steps in the bank reconciliation process. It imports data from both ERP or general ledger systems and bank files or statements. It then compares account balances and transaction details between these sources, and identifies any discrepancies so they can be investigated by accounting staff.

This removes the burden of manually matching transactions and frees accountants to focus on analyzing discrepancies.

Features include:

  • Automated account balance and transaction detail comparison

  • Review and approval workflows, with proper segregation of duties

  • Templates and checklists to standardize reconciliation processes

  • Integrated storage of any supporting documentation

What Solutions Does BlackLine Offer for Bank Reconciliations?

BlackLine Transaction Matching will import data from almost any source. This includes all major ERP systems as well as bank files and statements.

It is specifically designed to handle high-volume reconciliation and can rapidly match millions of transactions. It also contains configurable matching rules to handle the most complex matching scenarios.

BlackLine Account Reconciliations provides automated workflows to route reconciliations to the appropriate account owner, and centralized dashboards for full visibility into the status of the reconciliation. It also has customizable templates, checklists, and integrated storage for supporting documentation, to standardize the reconciliation processes across your organization.