| name | Reconciliation |
| description | Tie an account out to its source, and raise what does not reconcile as an exception rather than a plug. |
| category | Bookkeeping |
Reconciliation
Tie the ledger to the thing outside it — the bank, the processor, the payroll
provider — and account for every difference.
When to use
- A period is closing.
- An account balance is being relied on for anything.
Steps
- Fix the scope. Entity, account, period, currency. Assuming any of the
four is how most reconciliation errors happen.
- Get the external source, not a copy of it from another system. A
statement, an export, a provider report.
- Match what matches, then work the difference. Timing differences,
uncleared items and fees are the usual three, in that order of frequency.
- Explain every remaining difference. Not summarise — explain, with the
transaction behind it.
- Never plug. Anything still unexplained is an
exceptions row with the
amount and what it was traced to. unknown is a legitimate value; a rounding
entry that makes the difference disappear is not.
- Record the account on the
closes row under reconciled, named rather
than summarised.
Output
A tied-out account, an exceptions row for every unexplained difference, and
the closes row updated. A period does not close over an open exception without
somebody saying so explicitly.
