What is the practical purpose of reconciling in GNUCash?

[Colin Law]

On 12 December 2016 at 15:26, Robert Heller <heller at deepsoft.com> wrote:
> 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.
>

And to find unexpected transactions on your back account.

Colin