Why it matters
Common examples include matching bookkeeping to bank statements, payroll to control accounts and online sales to payment settlements. A difference may be a timing item, a missing transaction or an error. A useful reconciliation documents the explanation and leaves a clear trail for the next review. It is more than clicking through uncategorised bank entries.
A practical example
A payment provider shows £4,000 due to the business, while the bank has received £3,700. The remaining £300 could be fees, reserves or money still in transit. Settlement reports and the accounting records should explain the difference rather than posting it all to a miscellaneous expense.
A common misunderstanding
A matching total can still hide offsetting mistakes or duplicated entries. Review the underlying transactions and investigate old unreconciled amounts. Automated matching reduces routine work, but someone still needs to own the exceptions and supporting evidence.
General information for UK readers, updated 3 November 2026. Examples are illustrative. Tax treatment depends on the facts and current rules; seek advice before making a decision.