Definition of Reconciliation

Reconciliation became a term that was enough and even very familiar in the field of finance. Especially the finance that requires bookkeeping as in banking institutions. The existence of reconciliation can certainly help financial activities and activities anywhere.

Both in financial institutions such as banks and the like. The existence of this reconciliation can be useful to overcome some problems. What is certain is that these problems and constraints are related to calculations and finances. Perhaps you feel more and more curious about what the making of reconciliation is and how it is applied. For that, let’s look at the following explanation.

Definition of Reconciliation

The term reconciliation is already familiar in the banking world. It is known to citizens. But perhaps this only applies to academics and professionals. Meanwhile, ordinary people do not necessarily understand this meaning. The term reconciliation itself refers to the activity of differences.

In this case, the difference in question is the difference in transaction records between the bank and the customer. So the transactions at the bank are not the same as the transactions in the customer’s account. To overcome this, a reconciliation process is carried out. So the existing financial records in the banking institution and on the customer or customers are matched with each other.

From this matching process, it can later be known where the error lies. This transaction matching process also makes the process of finding mistakes easier. Of course, error points are expected to be found through the process of matching all financial transactions. Reconciliation is even the right solution for all of you to get the most appropriate transaction records.

the Definition of Reconciliation

Reconciliation Components

To be able to carry out activities to detail the differences in the records of these transactions, of course, several components are needed. The first component, in this case, is the in-process deposit. It refers to a recording error during the process of receiving money from the customer. This transaction may be recorded in the customer’s account book but not recorded at the bank.

The second component is a circulating check. What is meant by a check circulating here is a check that has been recorded in the customer but has not been at the bank. This can indeed cause errors in adding up customer balances. For this reason, matching financial transactions must be appropriate to find errors. The latter component is a blank check. Regarding this blank check, it seems to be quite different from the previous components. Because a blank check means the check is not accepted by the bank.

Because the balance owed by the customer is insufficient, then it cannot be disbursed. These three components, if they occur, the financial institution needs to prepare for the reconciliation process.

See Video How To Easily Send Money to 50+ Countries

Factors Causing Reconciliation

Differences in transaction records are not impossible for each customer from a particular financial institution. However, the form is still best done to match transactions from both parties. Namely from the customer and the banking financial institution. Of course, matching this transaction needs to be done if there are differences in transaction records. This difference is normal because of many things such as bank credit. Bank credit transactions can only be known if this has been received by the customer through a current account.

The second contributing factor to reconciliation is money order receivables. What is meant by money order receivables is a debt that is between the customer and the bank using a letter of agreement. So this money order debt can be said to be binding. Another cause of the difference in transaction records is the presence of bank expenses and income. Administrative burdens are often unknown to customers so they need to be checked and matched again.

Send Money Easily to Different Countries

How to Send Money to Hong kong
How to Send Money to China
How to Send Money to Malaysia
How to Send Money to Japan

Reconciliation Process

Whatever is done by the customer must certainly go through the provisions and procedures that have been set by the institution. Similarly, customers and customers from bank institutions want to match each other’s transactions. To get to this stage, it is necessary to check the transaction process beforehand. Through this stage, it can later be known that the process of recording transactions is quite different.

Then you head to the banking institution for reconciliation. Later, the differences will be found from the recording of transactions between customers and banks. Of course, the process of searching for differences is not as difficult as imagined. Because you just have to carry it out following the predetermined procedure and it is still valid.

Download Transfez App

Transfez App can help you transfer money abroad more quickly and efficiently. Transfez Business can also help your business in making transactions abroad. For those of you who want to send money to relatives who are abroad because they are studying, working, or traveling, Transfez will be ready to help. This app is available on Android as well as iOS.

google play store 350px appstore

Implementation of Reconciliation

Reconciliation in this country is still being carried out and carried out. This is none other because there are many things behind the difference in transaction recording. Until now, of course, this has been experienced by several companies in this country. The record on the current account is different from the record of the transaction in the bank.

This of course cannot be allowed to drag on because it can have a detrimental impact. Therefore, it is necessary to have an appropriate solution, namely reconciliation. With this activity, all mistakes can be searched properly. The essence of recording transactions can be found easily. So both customers and banking institutions can both find the obstacles faced.