Bank reconciliation software compares bank statement activity and balances with the cash records in the ledger. It helps the finance team identify missing entries, timing differences and transactions that need investigation.
Matching more frequently keeps the evidence close to hand, but frequency alone does not resolve an ambiguous payment. The system also needs complete data, sensible matching rules and a clear route for exceptions.
What is the difference between a bank feed and reconciliation?
A bank feed brings transactions into the accounting system. Reconciliation checks whether those transactions and the statement balance agree with the ledger after the team explains any differences.
A connected account can still have a broken feed, a missing day or a duplicate import. Ask the vendor to show the last successful update, the period covered and how finance detects a gap. A match rate says little if the input is incomplete.
Keep responsibility for reviewing each account explicit, including accounts with little activity. A quiet account can still carry fees, interest or an unexpected payment.
Which matching cases should the software handle?
Start with ordinary one-to-one matches, then work through the cases that slow your team down:
- One payment settling several invoices.
- Several payments settling one invoice.
- A receipt net of processing fees.
- A transfer between the company's own bank accounts.
- A refund, a reversal or a foreign currency difference.
For each case, inspect the proposed treatment and the evidence behind it. The system should leave an unresolved difference visible until someone resolves it under the agreed policy. An automatic write-off that makes a balance agree can conceal the very issue the reconciliation should reveal.
The payment reconciliation guide examines allocation to bills and customer invoices in more detail.
What do the difficult matches look like?
Use these illustrative amounts to test a demonstration. They are expected accounting outcomes under the stated assumptions, not examples of a customer's transactions or claims of automatic matching.
| Case | Starting evidence | Result finance should explain |
|---|---|---|
| Partial payment | A €1,000 customer invoice and a €600 receipt allocated to it | €600 allocated, with €400 still open |
| Processor settlement | A settlement report with €10,000 of customer receipts and €200 of fees, with no refunds or reserves | A €9,800 bank deposit, €200 fee expense and €10,000 cleared from the processor balance |
| Currency difference | A €1,000 receivable carried at £850, fully settled for £860 with no fee or earlier revaluation | The receivable clears and finance accounts for the £10 exchange gain |
| Unidentified receipt | A €750 bank credit with no reliable customer or invoice reference | An assigned investigation, without an invented invoice allocation |
The settlement example needs three checks: reconcile the underlying customer receipts to invoices, agree the processor report to its clearing balance, then match the €9,800 transfer to the bank. A bank deposit alone cannot establish gross sales or fee expense. Keep refunds, reserves and tax separate when they apply.
Use the payment reconciliation guide for allocation and the multi-currency accounting guide for rate and period checks. In Light, review the documented bank reconciliation workflow with the team and demonstrate the relevant case before relying on automation.
Can you reproduce the reconciliation later?
Take a closed period and ask another team member to explain the reconciliation. They should see the statement balance, ledger balance, outstanding items, adjustments and review record for that period.
Then test a correction. The product should make the history of the change understandable and respect the company's period controls. A live dashboard is useful during the month, while the close also needs evidence of the position the reviewer signed off.
For groups, repeat the test across entities and currencies. The multi-currency accounting guide covers the distinction between transaction amounts and reporting currency values.
How does Light approach bank reconciliation?
Light connects payment and accounting workflows with bank data, and its finance agents include bank reconciliation work. The buying test is whether that setup supports your actual accounts and exception types.
Ask the Light team to demonstrate a match, an unresolved difference and a completed period review. Confirm bank coverage and update frequency for each account you intend to connect. Those details matter more than a general promise of continuous reconciliation.
Which results should you measure?
Track unreconciled items by age and value, the time spent investigating them, and the number of corrections after review. Monitor feed completeness separately from matching performance.
Run the process throughout the month where that helps the team, then use the month-end close checklist to confirm cut-off, outstanding items and sign-off. Software should make that review better informed and easier to repeat.
See how reconciliation fits alongside project spending, intercompany journals and group reporting in accounting software for energy businesses.
For sales and settlement workflows, explore accounting software for ecommerce businesses and accounting software for marketplaces.
