Bank reconciliation is a key component of accounting, ensuring that internal accounting records match bank account transactions. In this article, you will learn what bank reconciliation is, how it works, whether it can be automated, and why dunning software solutions such as KLEVERBILL deliver clear value.

What is bank reconciliation?

Bank reconciliation (also called bank matching) is a comparison between the internal accounting ledger account “Bank” and the bank statement. The objective is to identify and resolve any discrepancies (e.g., from direct debits, transfers, or bank charges that have not yet been posted).

This ensures that the cash and bank balance reported in the balance sheet actually matches the bank account.

How does bank reconciliation work?

Bank reconciliation is typically performed at the end of a month or quarter, but in digitized processes it can also be carried out more frequently. It generally follows these steps:

1. Retrieve bank statement – bank account transactions are compiled.

2. Review accounting ledger account “Bank” – internal postings are retrieved.

3. Compare both lists – items are matched line by line.

4. Identify discrepancies – outstanding items or errors are detected.

5. Add or correct postings – unrecorded transactions are entered subsequently.

Can bank matching be automated?

Yes – today, bank matching can be largely automated using modern software.

Accounting systems and dunning software can access electronic bank statements directly (e.g., via DATEV interfaces or PSD2 interfaces) and generate posting proposals automatically. Outstanding receivables are then assigned to incoming payments automatically.

This saves time, reduces errors, and enables up-to-date accounting on a daily basis.

What dunning software solutions are available?

In addition to general accounting systems, which often include dunning features, there are specialized solutions for professional receivables management and dunning.

These solutions are designed to manage reminders, payment notices, and handovers to debt collection efficiently, while linking them with accounting data (e.g., from bank reconciliation).

Benefits of such solutions:

• Automated payment allocation

• Rapid identification of outstanding items

• Flexible dunning levels and deadlines

• Legally compliant forms and processes

Is dunning software worth it?

Definitely – especially for companies with many customers or high invoice volumes.

Specialized dunning software ensures that no outstanding receivables are “overlooked,” that reminders are sent on time and correctly, and that cash flow remains secure. At the same time, it saves time through automation.

And what about KLEVERBILL?

KLEVERBILL is an innovative dunning software solution developed specifically for small and medium-sized businesses. It supports bank reconciliation by automatically assigning payments to open invoices.

In addition, KLEVERBILL offers:

✅ Intuitive user interface

✅ Automated reminders as configured

✅ One-click debt collection integration

✅ Time savings through automation

With KLEVERBILL, you maintain full visibility of your receivables portfolio at all times, reduce overdue balances, and relieve your accounting team.

Automate bank reconciliation and optimize dunning

Bank reconciliation is an essential part of accounting to maintain full visibility over company finances. Modern software solutions – such as KLEVERBILL – help not only to automate bank matching but also to run the entire dunning process efficiently.

For growing companies in particular, investing in specialized dunning software is worthwhile to safeguard liquidity and prevent payment defaults.