What is the process known as when a company's ledgers are updated to reflect an invoice paid?

The process of updating a company's ledgers to reflect an invoice paid is known as reconciliation. Reconciliation involves matching the entries in the company's financial records with external documents, such as bank statements or invoices, to ensure accuracy and consistency. This process confirms that all transactions have been recorded correctly and that financial statements accurately reflect the company's financial position.

In the context of an invoice being paid, reconciliation provides a detailed view of the payment against the corresponding invoice. It ensures that the ledger accurately reflects the payment, thus maintaining organized and precise financial records. Proper reconciliation is critical for financial health, as it helps identify discrepancies, aids in budgeting, and supports effective financial reporting.

The other processes mentioned, such as verification, settlement, and authorization, have distinct meanings in financial transactions but do not specifically refer to the act of updating ledgers to reflect payment of invoices. Verification typically refers to confirming the accuracy of a transaction prior to its recording, settlement relates to the final completion of a transaction, and authorization is the approval process necessary to allow a transaction to proceed. Reconciliation, therefore, is the most appropriate term for updating ledgers after payments have been made.