Definition
The process of matching the HOA's own records to its bank statement to confirm every transaction agrees.
Bank reconciliation is the routine check that the association's books match its bank statement. Every deposit and payment recorded should agree with the bank; differences are investigated and resolved.
Done monthly, reconciliation catches errors, missing transactions, and — importantly — potential fraud. It's a basic but essential financial control, and reconciled books are the starting point for trustworthy reports and a smooth audit.