A total matching an expected balance is not sufficient. Good reconciliation explains differences and assigns resolution owners. For banks, compare the ledger to statements. For inventory, connect records to item movements, physical counts and accounting valuation.
Bank reconciliation
- Use a consistent period and a separate account for each bank or collection method.
- Match receipts, payments, fees and transfers between accounts.
- Separate timing differences from missing, incorrect or duplicated entries.
- Track outstanding items by age, evidence and owner.
Inventory balance reconciliation
Define the cutoff date and surrounding receipts and issues, then reconcile quantities to approved counts. Review units, cost, damage and returns and their effect on inventory value and cost of sales. Do not expense a difference before investigating its cause and approving treatment.
From reconciliation to control
Separate preparation from review where practical and choose a frequency proportionate to activity and risk. Retain approved reconciliations linked to adjustment entries, escalating old or unusual items rather than carrying them forward without follow-up.
Prof Accountant organises reconciliations, exception logs and adjustments so management can rely on balances with clear explanations and supporting evidence.