Imagine this. John Carter begins his job as the country club’s new finance and administration director by reconciling its payroll journal entries with employee payroll logbooks provided by its payroll processor. It takes him weeks and distracts him from other important issues. Eventually, Carter deduces that the club’s HR director is misappropriating thousands of dollars in overpayments to herself and other employees.
Without reconciliation, Carter might not have been able to discover the fraud. He might have caught it sooner — maybe even prevented it — if the club had a monthly or biweekly reconciliation policy that provided tight oversight of its bookkeeping.
