I see Paul using two separate, but interlocking images in this section. Both turn on the verse left out of the question. Colosians 1:21 (NIV):
Once you were alienated from God and were enemies in your minds because of your evil behavior.
The first is restoring creation, which fits well with Paul's portrayal of Jesus as creator. Colosians 1:15-18 (NIV):
The Son is the image of the invisible God, the firstborn over all creation. For in him all things were created: things in heaven and on earth, visible and invisible, whether thrones or powers or rulers or authorities; all things have been created through him and for him. He is before all things, and in him all things hold together. And he is the head of the body, the church; he is the beginning and the firstborn from among the dead, so that in everything he might have the supremacy.
So the resolution alluded to in verse 20 is restoring everything to its Genesis 1 state (i.e., "very good"). Since there was no evil then and since people are sinful, something must be done to transform them to their original state. Of course, the treatment is Christ's work on the cross and if the Colossians continue in their faith they will obtain the hope. If they refuse to be transformed, they will cease to be part of creation and thus cease to be among the "all things" of verse 20. (We don't know from this passage if that means being expelled from creation as Adam and Eve were expelled from the Garden or if they simple cease to have any existence at all.)
The second image is of settling debts, which is an image Paul doesn't really develop until the next chapter. Colossians 2:13-14 (NIV):
When you were dead in your sins and in the uncircumcision of your flesh, God made you alive with Christ. He forgave us all our sins, having canceled the charge of our legal indebtedness, which stood against us and condemned us; he has taken it away, nailing it to the cross.
"Reconcile" in verse 20 clearly means the same thing as nailing the charge of indebtedness to the cross. A modern equivalent action might be the government taking over your home loan as a very generous bailout. You no longer have any obligation to the lender and you don't have a financial or legal responsibility to the government. (But you would have a moral obligation of gratitude.)
Now verse 22 refers to the same moment—the cross, but verse 23 shifts to the present consequences. (The transition is strange but clear in English.) Paul's argument in chapter 2 (and in Galatians) is that if the debt is paid off, we shouldn't act as if we still owed something. In a sense, if we "hedge our bets" by continuing to pay off our debt, we give up our claim to the forgiveness of debt. The reconciliation certainly happened, but depending on how the Colossians respond, they might undue the reconciliation in a sense.
The word translated "reconcile" here is apokatallasso <604> from apo <575> meaning either "of separation" or "of origin" and katallasso <2644> meaning "to change, exchange, as coins for others of equivalent value". Further katallasso is a compound of kata <2596> meaning "down from, through out" or "according to, toward, along" and allasso <236> meaning "to change, to exchange one thing for another, to transform".
In both cases, the verb is in the aorist tense which refers to a particular moment in time. "Continue" in verse 23 is in the present tense. The details of the Greek tenses may be discovered by looking at specific verses on
classic.net.bible.org and examining the Strong's numbers under the Greek text.