Bank reconciliation is the process of comparing your accounting software's cash/bank ledger balance with your actual bank statement balance, and explaining every difference. Done monthly, it catches errors before they become problems.
The two balances are rarely identical at any point in time — and that's normal. Common reasons:
Go to Banking → Cash / Bank Book & Reconciliation. Select your bank account and the month. Enter your bank statement's closing balance. Then check off each entry that matches the bank statement. Uncleared items are shown separately — these explain the difference between your book balance and the bank balance.
When the reconciliation is complete (uncleared items fully explain the difference), print the reconciliation statement for your records. This is often required by auditors and CAs during financial year closing.
At minimum, once per month. For high-volume businesses (many daily transactions), weekly reconciliation is better. The longer you leave it, the more time-consuming it becomes to untangle.