What's the difference between "paid" and "reconciled"?

Paid means a payment has been recorded on the bill or invoice — your books show the receivable or payable cleared. Reconciled means that payment has also been matched against a real bank transaction, proving the money actually moved. A bill can be paid (per your books) but not yet reconciled (the matching bank line hasn't landed, or you haven't linked it). End-of-month bank reconciliation closes that gap and is what auditors look at — the books and the bank statement agreeing line by line.