Reconciliation is the process of comparing two sets of records to ensure they agree. Common types include bank reconciliation, accounts receivable reconciliation and intercompany reconciliation.
Reconciliation is one of the most important bookkeeping processes because it verifies the accuracy of your financial records. At its core, reconciliation means comparing your records to an independent source and investigating any differences. Bank reconciliation (comparing your books to bank statements) is the most common type, but other reconciliations include: AR reconciliation (comparing the subsidiary ledger to the general ledger and to customer statements), AP reconciliation (comparing your records to supplier statements), inventory reconciliation (comparing book records to physical count), payroll reconciliation (comparing payroll records to bank payments and tax filings) and intercompany reconciliation (comparing transactions between related entities). Regular reconciliation catches errors, identifies fraud, ensures completeness and maintains the integrity of your financial data. SortBooks automates the most time-consuming part of reconciliation - matching bank transactions to accounting records - achieving real-time bank reconciliation that keeps your books clean continuously.
SortBooks automates the bookkeeping processes related to reconciliation by connecting to your Xero account and using AI to categorise transactions, reconcile bank feeds and generate accurate reports. Instead of manually managing reconciliation, SortBooks handles it automatically with 97%+ accuracy - saving you hours every week and ensuring your books are always up to date and compliant.
Bank reconciliation is the process of matching your accounting records to your bank statement to ensure they agree. It identifies discrepancies, errors and missing transactions.
Accounts receivable (AR) is the money owed to your business by customers who have purchased goods or services on credit. It is a current asset on your balance sheet.
Accounts payable (AP) represents the money your business owes to suppliers and vendors for goods or services received but not yet paid for. It is a current liability on your balance sheet.
An audit trail is a chronological record of all financial transactions and changes made in your accounting system. It provides a verifiable history that supports the integrity of your financial data.
Internal controls are processes and procedures designed to safeguard business assets, ensure accurate financial reporting and prevent fraud or errors.
SortBooks handles all the complexity automatically. Just connect Xero and let AI manage your books.