Reconciliation should happen monthly at minimum. Discrepancies arise for three main reasons: timing differences (a cheque issued but not yet cleared), errors in data entry, or missing transactions (bank charges that were not recorded in your books). In UAE businesses, unexplained reconciliation differences are a serious red flag — both internally and to the FTA if your VAT return figures don't tie back to bank movements.
Pro tip: Set aside 30 minutes every month-end to reconcile. It is far easier to find a AED 500 discrepancy in the month it occurs than to untangle six months of differences when your auditor arrives.
See also: Audit Trail, Bookkeeping, General Ledger
