Finance Reconciliation

Account Reconciliation

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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.

Reconcile GL account balances to subledger, bank, or third-party balances. Identify and categorize reconciling items and generate a reconciliation workpaper.

Usage

You can ask to reconcile an account (e.g., "Reconcile the bank account" or "Prepare the AP recon").

Arguments

• account — The account or account category to reconcile. Examples:
  • cash or bank — Bank reconciliation (GL cash to bank statement)
  • accounts-receivable or ar — AR subledger reconciliation
  • accounts-payable or ap — AP subledger reconciliation
  • fixed-assets or fa — Fixed asset subledger reconciliation
  • intercompany or ic — Intercompany balance reconciliation
  • prepaid — Prepaid expense schedule reconciliation
  • accrued-liabilities — Accrued liabilities detail reconciliation
  • Any specific GL account code (e.g., 1010, 2100)
• period — The accounting period end date (e.g., 2024-12, 2024-12-31)

Workflow

1. Gather Both Sides of the Reconciliation

If an ERP or data warehouse is connected:

• Pull the GL balance for the specified account(s) as of period end
• Pull the subledger, bank statement, or third-party balance for comparison
• Pull prior period reconciliation (if available) for outstanding item carryforward

If no data source is connected:

Connect an ERP or data warehouse to pull account balances automatically. To reconcile manually, provide:

1. GL side: The general ledger balance for the account as of period end
2. Other side: The subledger balance, bank statement balance, or third-party confirmation balance
3. Prior period outstanding items (optional): Any reconciling items from the prior period reconciliation

2. Compare Balances

Calculate the difference between the two sides:

Copy code
GL Balance:                    $XX,XXX.XX
Subledger/Bank/Other Balance:  $XX,XXX.XX
                               ----------
Difference:                    $XX,XXX.XX

3. Identify Reconciling Items

Analyze the difference and categorize reconciling items:

Timing Differences (items that will clear in subsequent periods):

• Outstanding checks / payments issued but not yet cleared
• Deposits in transit / receipts recorded but not yet credited
• Invoices posted in one system but pending in the other
• Accruals awaiting reversal

Permanent Differences (items requiring adjustment):

• Errors in recording (wrong amount, wrong account, duplicate entries)
• Missing entries (transactions in one system but not the other)
• Bank fees or charges not yet recorded
• Foreign currency translation differences

Prior Period Items (carryforward from prior reconciliation):

• Items from prior period that have now cleared (remove from reconciliation)
• Items from prior period still outstanding (carry forward with aging)

4. Generate Reconciliation Workpaper

Copy code
ACCOUNT RECONCILIATION
Account: [Account code] — [Account name]
Period End: [Date]
Prepared by: [User]
Date Prepared: [Today]

RECONCILIATION SUMMARY
=======================

Balance per General Ledger:              $XX,XXX.XX

Add: Reconciling items increasing GL
  [Item description]                     $X,XXX.XX
  [Item description]                     $X,XXX.XX
                                         ---------
  Subtotal additions:                    $X,XXX.XX

Less: Reconciling items decreasing GL
  [Item description]                    ($X,XXX.XX)
  [Item description]                    ($X,XXX.XX)
                                         ---------
  Subtotal deductions:                  ($X,XXX.XX)

Adjusted GL Balance:                     $XX,XXX.XX

Balance per [Subledger/Bank/Other]:      $XX,XXX.XX

Add: Reconciling items
  [Item description]                     $X,XXX.XX

Less: Reconciling items
  [Item description]                    ($X,XXX.XX)

Adjusted [Other] Balance:                $XX,XXX.XX

DIFFERENCE:                              $0.00

5. Reconciling Items Detail

Present each reconciling item with:

6. Review and Escalation

Flag items that require attention:

• Aged items: Reconciling items outstanding more than 30/60/90 days
• Large items: Individual items exceeding materiality thresholds
• Growing balances: Reconciling item totals increasing period over period
• Unresolved prior period items: Items carried forward without resolution
• Unexplained differences: Amounts that cannot be tied to specific transactions

7. Output

Provide:

1. The formatted reconciliation workpaper
2. List of reconciling items with categorization and aging
3. Required adjusting entries (if any permanent differences identified)
4. Action items for items requiring follow-up
5. Comparison to prior period reconciliation (if available)
6. Sign-off section for preparer and reviewer