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Ledger Reconciliation Meaning

The process of comparing two sets of records-usually an internal company ledger and an external bank or blockchain record-to ensure they match and are accurate. In traditional finance, this is a manual and painful process often done at the end of every month.

In a "real-time" digital economy, reconciliation is increasingly automated. Because blockchain transactions are verifiable and "final" as soon as they are on the ledger, software can perform "continuous reconciliation," flagging any discrepancies the moment they happen.

For a fintech company, efficient reconciliation is vital for compliance and financial health. If the company’s internal database says a user has $1,000 but the bank (or the blockchain) says they only have $900, the company must find the "leak" immediately.

Automation reduces the human error that leads to these costly mistakes.

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