Reconciling a bank statement is the process of matching up the transactions shown on your bank account to corresponding transactions in your records. It’s essentially a way of making sure that you know where all of your money is going and that the cash balance of your bank statement is correct. By having a clear understanding of your finances, you can improve cash flow management and monitor any discrepancies in your accounting records. Reconciling a bank statement is essential for ensuring accurate financial reporting and can help prevent fraud or unauthorized use of funds.