Account Reconciliations

It is less common to reconcile a revenue or expense account since the account balances are flushed out at the end of each fiscal year.

Account reconciliations. Reconciling an account is likely to mean proving or documenting that an account balance is correct. Account reconciliations software removes the risk of the old world of paper based manual spreadsheets by maintaining proper segregation of duties creating post certification view only records automatically adding new erp accounts and gaining unprecedented visibility into accounting processes. Reconciliations help automate the financial close process. Checking account with the bank s information.

Doing so helps to identify errors before closing. Because your company balance sheet reflects all money spent whether cash credit or loans and all assets purchased with those funds the accuracy of the balance sheet strongly depends on the accurate reconciliation of your company s financial accounts. Accountants perform account reconciliation with the following steps. An account reconciliation is usually done for all asset liability and equity accounts since their account balances may continue on for many years.

Examples of reconciling an account when a company reconciles its bank statement it is reconciling the balance in its general ledger account cash or cash. To better explain account reconciliation it is one of the most common yet important actions taken for managerial accounting it is also important to reconcile balance sheet accounts at the end of a period month quarter or year end as part of the closing process. According to investopedia the definition of account reconciliation is an accounting process that compares two sets of records to check that figures are correct and in agreement. Account reconciliation also confirms that accounts in the general ledger are consistent accurate and complete.

This is done by making sure the balances match at the end of a particular accounting period. Account reconciliations seem so simple yet why is it that they are so often challenging to keep on top of and to do well. Double entry accounting is a useful way of reconciling accounts that helps to catch errors on either side of the entry. Reconciling accounts and comparing transactions also helps your accountant produce reliable accurate and high quality financial statements.

Another way of performing a reconciliation is via the account conversion method. We propose below some simple concepts starting with the account reconciliation design through to their execution that will improve your reconciliation process and also simplify their performance through clearly stated objectives and framework.