Bank statement reconciliation is the task of comparing the cash balance in a business's own books with the balance on its bank statement, matching the transactions that appear in both, and explaining every difference. It is more often called simply a bank reconciliation, and the full explanation of the method is in the Bank Reconciliation entry.
Most differences are timing items. A cheque the business has written may not yet have been cashed, a deposit made late on the last day may not yet show on the statement, and the bank may have charged fees or credited interest that the business has not yet recorded. Once these are listed, the adjusted figures should agree; anything left over points to an error, a missing entry or an unauthorised transaction. Corrections are then posted in the general ledger.
Small businesses often reconcile monthly; firms with large payment volumes do it daily using automated matching. It is one of the most common types of reconciliation.