What is the practical purpose of reconciling in GNUCash?

[Robert Heller]

At Mon, 12 Dec 2016 06:26:59 -0800 (PST) replicon <replicon at gmail.com> wrote:

> 
> Hi all,
> 
> This might seem like a silly question, but... Does reconciliation have any
> actual practical side-effects, like changes in how reports are generated, or
> anything like that?
> 
> It seems to me like nothing but a feel-good blue line that makes it harder
> to refactor your CoA later (e.g. suppose you suddenly want to know how much
> you've been spending on coffee every day, so maybe you want to create a
> subaccount under expenses and move all "coffee break" transactions in
> there). Or just in general, if I want to move accounts around, or
> whatever...
> 
> If I always look at the final balance for my bank accounts/loans when I
> record something, which means my tracking file is ALWAYS in a good state as
> of the last entry, is there any positive side-benefit of reconciling? Seems
> like it's just a confirmation of something everyone should just be doing
> anyway (having the correct balance in the end).
> 
> So, I haven't been reconciling anything. Am I missing out on anything
> useful/important? :)

Reconciliation is mainly to make sure your accounting and the bank's 
accounting match up. Generally, you get a bank statement at the end of the 
month and you use that to check off items in your checkbook (or GNUCash 
account ledger) and then reconcile using the bank's ending balance. If the 
bank's ending balance equals your cleared balance, things are good.  Otherwise 
someone (you or the bank) have made a mistake somewhere.

You really only need/should reconcile accounts that represent your accounting
of a bank account (eg checking, savings, etc.). There is little need or reason
to reconcile any other accounts.  Reconciliation is a sort of "error check" 
feature intended to catch [human] errors in the accounting process.

> 
> 
> 
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