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A reconciliation report is a type of document that helps to provide the means of resolving differences between various types of disbursements or receipts associated with a given task. Reports of this type are often used by financial institutions to make sure all accounts are in order. Companies will also make use of a reconciliation report to balance or reconcile figures associated with different budgetary line items, including the payroll. When it comes to inventory reconciliation, the report will often help to resolve any differences that may be present between a physical inventory and the inventory that is reflected in company records.
As a general tool in financial accounting, a reconciliation report makes it possible to review all transactions associated with a given line item or account and make sure the account is balanced. An accounts payable report would seek to balance the presence of pending payables with actual disbursements, and would be considered balanced as long as the disbursements take place before those debts pass their due dates. In like manner, a payroll report would reflect the balances due to employees for a given pay period and reconcile those with the actual disbursements from the payroll account.
A bank reconciliation report will often focus on making sure that all credits and debits associated with each customer account are posted properly and that those accounts are balanced accurately. Exceptions that may be found during the process of reconciliation are researched and usually resolved quickly, although some banking institutions do allow for some type of account that serves as a temporary means of accounting for unresolved banking transactions that have not yet been associated with a particular account. The overall process makes it easier to keep the bank’s finances and its customer records up-to-date and free of error.
The inventory reconciliation report is a common tool used in manufacturing settings as well as retailers and other businesses that maintain various types of inventories. A reconciliation is usually necessary when the physical count of the inventory uncovers discrepancies with the company inventory records. Events of this type can occur for a number or reasons, including a failure to accurately count items as they were received as part of an inbound shipment, failing to completely fulfill a shipping order while still marking it as closed in the company records, or even theft of items from the inventory. In most cases, the preparation of the reconciliation report will also include details as to what most likely led to the discrepancy, and adjusts the company’s records to reflect the physical inventory that is on hand.
I deal with reconciliation reports monthly at my office. Those are critical as they track all of our expenses and revenue. Anyone in charge of the money at a company should insist on doing these and having them reviewed closely so that everyone in charge knows where the money is going.
That protects both the organization and the financial manager for obvious reasons.