Reconciliation is a process that involves comparing and contrasting two sets of records to ensure that the figures are correct and in agreement). It is a general practice for businesses to create their balance sheet at the end of the financial year as it denotes the state of finances for that year). Reconciliation is not only important for businesses, but it may also be convenient for households and individuals. For example, individuals can use reconciliation to check the accuracy of their bank and credit card account statements.
Benefits of reconciliation include mitigating the mistakes made by financial institutions or fraudulent withdrawals from an account, ensuring the reliability of financial records, and avoiding balance sheet errors that may have led to detrimental ramifications). Reconciliation can also help against fraud and can help instill financial integrity).
In addition to accounting, reconciliation can also refer to the act of coming to an understanding and putting an end to hostility, as when former enemies agree to an amicable truce.
The US government also uses a legislative process called "reconciliation" to quickly advance high-priority fiscal legislation. This process enables expedited passage of a bill relating to certain matters in the federal budget by a simple majority of votes.
