A later section of this handbook discusses reconciliation in more detail. For now, it is only important to know that transaction can have one of three states: not marked (blank), cleared (C), or reconciled (R). When a transaction is entered, it's state is set to the value specified in the “Data entry” tab of the “Ledger” section of the KMyMoney configuration dialog, which defaults to “not marked”. Once the bank posts the transaction, the user can mark it as cleared and thus transform it to state (C). Note that these are only a subset of the states described earlier as available in the Ledger Filter.

When you receive a statement from the bank, all cleared transactions should be on the statement. When you reconcile your account, you confirm that the transactions marked Cleared and the transactions listed on the statement are the same, and that the beginning balance plus the sum of the cleared transactions equals the ending balance of the statement. When this is the case, you can 'finish reconciling' which changes the state of all cleared (C) transactions prior to the date of reconciliation to reconciled (R).

If you try to edit a transaction with at least one split marked as reconciled (R), you will be warned. There is a further discussion about why this is important in the section on Reconciliation.