Glossary
Reconciliation terms, in plain English.
Search or browse definitions for the terms that come up in every close.
A
- Account reconciliation
- Comparing two sets of records — usually the general ledger and an external statement — to confirm they agree and explain any differences.
- Accrual
- Revenue or expense recorded when it's earned or incurred, regardless of when cash changes hands.
- Adjusted bank balance
- The bank statement balance plus deposits in transit, minus outstanding checks. It should equal the ledger balance.
- Anomaly detection
- Automatically flagging transactions that look unusual — a new payee, an outlier amount or a possible duplicate.
- Audit trail
- A chronological record of who did what to a transaction or report, and when.
B
- Bank feed
- An automated connection that imports transactions from a bank into accounting or reconciliation software.
- Bank reconciliation
- Matching the transactions and balance in your ledger's cash account to your bank statement.
- Batch deposit
- Several payments deposited together, appearing as one line on the bank statement.
C
- Chart of accounts
- The list of all accounts a business uses to categorize its financial transactions.
- Clearing account
- A temporary account used to hold amounts until they're moved to their final destination, such as processor payouts.
- Close checklist
- The list of tasks that must be completed to close an accounting period.
- Confidence score
- A measure of how likely an AI-proposed match is to be correct.
D
- Deposit in transit
- A deposit recorded in the ledger that hasn't appeared on the bank statement yet.
- Duplicate transaction
- The same transaction recorded more than once, often from a feed plus a manual entry.
E
- Exception
- A transaction that couldn't be matched automatically or was flagged for human review.
- Explainable AI
- AI that shows the reasoning behind each decision so people can verify it.
F
- Fuzzy matching
- Matching records that are similar but not identical, such as truncated payee names.
G
- General ledger (GL)
- The master record of all of a company's financial transactions.
I
- Intercompany transaction
- A transaction between two entities in the same group, which must be recorded on both sides.
J
- Journal entry
- A record of a transaction in the ledger, showing the accounts debited and credited.
M
- Many-to-many match
- Several transactions on one side matched to several on the other.
- Materiality
- The threshold above which a difference is significant enough to investigate or report.
- Month-end close
- The process of finalizing the books for a month so financial statements can be produced.
O
- One-to-many match
- A single transaction matched to several on the other side, such as one payout to many invoices.
- Outstanding check
- A check recorded in the ledger that hasn't cleared the bank yet.
P
- Payout
- A transfer from a payment processor to your bank, usually net of fees and refunds.
- Period lock
- A setting that prevents changes to transactions in a closed accounting period.
- Preparer / reviewer
- A control where one person prepares a reconciliation and a different person reviews and approves it.
R
- Reconciliation report
- A document showing how the statement balance ties to the ledger balance, including all outstanding items.
S
- Subledger
- A detailed ledger (like AR or AP) that rolls up into a single control account in the general ledger.
- Suspense account
- A temporary account for transactions whose correct classification isn't known yet.
T
- Transposition error
- Two digits swapped when entering a number. The resulting difference is always divisible by 9.
U
- Unreconciled difference
- The amount by which the adjusted bank balance and ledger balance disagree.
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