Account reconciliation (lettrage)

Reconciliation is the accounting process of matching a payment to the invoice(s) it settles in the customer’s account. Reconciled line items are settled; those that remain unreconciled are still outstanding.

Example

A customer pays €5,000 for two invoices totaling €3,000 and €2,000. The accountant posts the payment against the two invoices: the customer’s account is now in good standing.

Why It’s Important

Up-to-date records are essential for knowing exactly what is owed. Otherwise, there is a risk of resending invoices that have already been paid or overlooking unpaid ones.

For more information: the Order-to-Cash Guide.

See also: automatic reconciliation, accounts receivable, actual balance.