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In accounting, reconciliation refers to the process of ensuring that two sets of records (usually the balances of two accounts) are in agreement. Reconciliation is used to ensure that the money leaving an account matches the actual money spent, this is done by making sure the balances match at the end of a particular accounting period.
Well reconciliations refers to two sets of records (what is being put in the well compared to what actual costs are being spent). Each account is given a work breakdown structure number (WBS) that will determine the cost of the well. The two numbers are compared to assure that they balance at the end of the accounting cycle. There is usually a difference.
To ensure the reliability of the financial records, reconciliations must, therefore, be performed for all Balance Sheet accounts on a regular and ongoing basis. A robust reconciliation process improves the accuracy of the financial reporting function and allows the Finance Department to publish financial reports with confidence.