Imagine you’ve just closed a big sale and are expecting your account balance to increase. But when you check your bank, the balance doesn’t match your internal records.
The difference may be small, but even being off by just a few cents can make you pause and ask, “Wait, why is this happening?” when reviewing your business finances.
This kind of confusion is very common in business, and it’s exactly why bank reconciliation is so important.
Also Read: General Ledger 101, Definition and CharacteristicsWhat Is Bank Reconciliation?
Example of bank reconciliation.
Bank reconciliation is the process of comparing and adjusting a company’s financial transaction records with the records from the bank account.
It’s important because sometimes transactions have extra components or are still in process, such as:
- Customer transfer received but not yet recorded
- Bank fees not included in books
- Checks still clearing
- Input errors by the team
With reconciliation, businesses can ensure that the numbers in their books are truly accurate.
The Purpose of Bank Reconciliation
For some, this process feels tedious. But bank reconciliation is far from pointless. Here’s why it matters:
01
Ensure accurate financial reports
Balance differences can mislead business decisions.
02
Detect errors quickly
For example, duplicate entries or wrong inputs.
03
Reduce fraud risk
Suspicious or illegal transactions can be spotted early.
04
Cash flow management
You know the real usable balance, not just numbers on paper.
Steps in Bank Reconciliation
To get the basics right, here’s what you need:
Prepare documents
Latest bank statement + internal records (ERP/cashbook).
Compare transactions
Check if all inflows and outflows are recorded on both sides.
Note differences
Often due to fees, interest, pending transfers, uncleared checks, or errors.
Make adjustment entries
Correct internal records so balances align with the bank.
Confirm ending balance
Book balance should match the bank balance.
Easy & Automatic
Bank Reconciliation with ERP
Manually matching transactions one by one can be overwhelming. With Odoo, this process becomes automatic.
All transactions from your bank account can flow directly into the system and be matched with your records in just a few clicks.
How to Do Bank Reconciliation in Odoo
01. Connect bank account to Odoo
Daily transactions (debit/credit) flow automatically into the system.
02. View transactions on Odoo’s dashboard
No need to download and upload bank statements manually.
03. Auto-match transactions
Odoo matches bank transactions with invoices, vendor bills, bank fees, or journals.
- If matched, the system marks them reconciled.
- If not, Odoo suggests possible matches for you to review.
04. Review unmatched transactions
For example, a transfer with no reference can be quickly updated.
05. Get real-time cash balance reports
Once reconciled, your Odoo balance mirrors the actual bank balance. Your financial reports stay accurate, no waiting until month-end.
With Odoo, bank reconciliation becomes fast, accurate, smart, and fully integrated with the rest of your business. No more manual matching, just real-time clarity. Experience the difference with us! 👇
