Reconciliation (in French, lettrage) is a subsidiary-ledger operation that consists of matching entries that offset each other within the same third-party account — most often a customer invoice (on the debit side) and the corresponding payment (on the credit side), or a supplier invoice and its disbursement.
In practice, the same letter or code (A, B, AA, etc.) is assigned to the entries that balance out — hence the French name lettrage. When the total of the reconciled debits equals the total of the credits, the lines are considered reconciled and cleared. Entries that remain unreconciled represent outstanding items: unpaid invoices, unallocated payments on account, credit notes still to be applied.
Reconciliation is therefore an essential tool for tracking customer and supplier accounts: it feeds the aged trial balance, makes dunning more reliable and eases matching before closing. The FEC even includes two dedicated columns (reconciliation code and reconciliation date), proof of the regulatory importance of this information.
A distinction is drawn between manual reconciliation, where the operator matches the lines one by one, and automatic reconciliation, which matches entries by amount, document number or reference. In eyeot's accounting, reconciliation is carried out on the third-party accounts of the French general chart of accounts.