​Bank reconciliation is the process of matching your bank transactions with your business records, such as customer invoices, vendor bills, and payments. Not only is this compulsory for most businesses, but it also offers several benefits, such as reduced risk of errors in financial reports, detection of fraudulent activities, and improved cash flow management.
Why it matters?
There are many reasons why you should reconcile your bank statements; from fraud protection to avoiding jumbled books from human error.
Here are all the reasons why you should consistently reconcile your bank accounts:
•    Fraud Detection
While the bank reconciliation process may not be able to stop fraud from happening, it may at least tell you when it happens.
For instance, let's say that you paid a vendor, but they tampered with the amount and made it larger - cashing it afterward. You may not learn about it until you see it on your financial statements, comparing your receipts to how much money was pulled from your account.

•    Business Financial Status
Bank reconciliation statements can tell you exactly where your business is. For example, if your accounting records don't match your bank statement balance, you might end up paying more money than you actually have.
A bank reconciliation statement can help you catch any potential interest income or bank service fees that you were not aware of. This way, you will know that the bank balance of your company is in fact accurate.
•    Tracking Cash Flow
As a business owner, it is important that you track the cash flow of your business. Through bank reconciliation, you can see how the money flows into your accounting records and joins your bank balance, helping you plan your payments and spend money efficiently.
•    Detecting Bank Errors
While rare, banks can sometimes make mistakes. If there are discrepancies between your own records and the bank records, then bank reconciliation can prove very helpful. If you cannot seem to find an explanation for those errors, then it might be a good idea to talk to someone from the bank.
•    Accurate Tax Reporting
For your tax return to be accurate, your bank statement balance and your own balance must be accurate.