What is reconciliation in QuickBooks Online?

Reconciliation in QuickBooks Online specifically refers to the process of matching transactions recorded in QuickBooks with those on your bank statements. This is essential for confirming the accuracy of your financial records. When you complete a bank reconciliation, you ensure that the amounts in QuickBooks reflect the actual transactions occurring in your bank accounts. This helps in identifying any discrepancies, such as missed transactions, duplicate entries, or errors, which can impact your financial reports.

The other options do not accurately capture the primary function of reconciliation within QuickBooks. Comparing customer payments to invoices focuses on accounts receivable and billing accuracy, while reviewing sales reports pertains to analyzing revenue rather than reconciling bank statements. Creating financial summaries for tax purposes involves summarizing and organizing financial data for reporting but does not involve the direct matching of transactions against bank statements, which is the essence of the reconciliation process.