reconciliation

Important: This skill assists with reconciliation workflows but does not provide financial advice. All reconciliations should be reviewed by qualified financial professionals before sign-off. Methodology and best practices for account reconciliation, including GL-to-subledger, bank reconciliations, and intercompany. Covers reconciling item categorization, aging analysis, and escalation.

Compare the general ledger control account balance to the detailed subledger balance. Common accounts: • Accounts receivable (GL control vs AR subledger aging) • Accounts payable (GL control vs AP subledger aging) • Fixed assets (GL control vs fixed asset register) • Inventory (GL control vs inventory valuation report) • Prepaid expenses (GL control vs prepaid amortization schedule) • Accrued liabilities (GL control vs accrual detail schedules) Process: • Pull GL balance for the control account as of period end • Pull subledger trial balance or detail report as of the same date • Compare totals — they should match if posting is real-time • Investigate any differences (timing of posting, manual entries not reflected, interface errors) Common causes of differences: • Manual journal entries posted to the control account but not reflected in the subledger • Subledger transactions not yet interfaced to the GL • Timing differences in batch posting • Reclassification entries in the GL without subledger adjustment • System interface errors or failed postings

Compare the GL cash balance to the bank statement balance. Process: • Obtain the bank statement balance as of period end • Pull the GL cash account balance as of the same date • Identify outstanding checks (issued but not cleared at the bank) • Identify deposits in transit (recorded in GL but not yet credited by bank) • Identify bank charges, interest, or adjustments not yet recorded in GL • Reconcile both sides to an adjusted balance Standard format: ` Balance per bank statement: $XX,XXX Add: Deposits in transit $X,XXX Less: Outstanding checks ($X,XXX) Add/Less: Bank errors $X,XXX Adjusted bank balance: $XX,XXX Balance per general ledger: $XX,XXX Add: Interest/credits not recorded $X,XXX Less: Bank fees not recorded ($X,XXX) Add/Less: GL errors $X,XXX Adjusted GL balance: $XX,XXX Difference: $0.00 `

Reconcile balances between related entities to ensure they net to zero on consolidation. Process: • Pull intercompany receivable/payable balances for each entity pair • Compare Entity A's receivable from Entity B to Entity B's payable to Entity A • Identify and resolve differences • Confirm all intercompany transactions have been recorded on both sides • Verify elimination entries are correct for consolidation Common causes of differences: • Transactions recorded by one entity but not the other (timing) • Different FX rates used by each entity • Misclassification (intercompany vs third-party) • Disputed amounts or unapplied payments • Different period-end cut-off practices across entities