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Multiple reconciliations are needed to be completed before a book can be deemed ready for month end closing.

Objective of a Reconciliation:

Reconciliations are done to ensure that the period to be closed contains accurate and reliable numbers. This is important since discrepancies that have not been addressed for quite some time become very difficult to resolve.

Bank Reconciliation

  • Ensures that all the outstanding unreconciled items in the bank transactions are completed for each month end. This is to make sure that the cash balance is updated at each month end. All the payments and purchase receipts are matched with the correct vendor payments or debit card spent. The money receipts are also matched to the correct sales invoices.

Credit Cards Reconciliation

  • Makes sure that the client sends relevant receipts spent using the company’s credit card and reviews the expense report related to this. This is to properly match the transactions uploaded in the bank and eventually close this for the month.

Multiple Currency Reconciliation

  • This type of reconciliation happens if a transaction involves two or more currencies in a single transaction.
  • Though a reconciliation of this type of transaction involves a process different from the regular Bank or Credit Card Reconciliation, ensures that all the outstanding multi-currency unreconciled items in the bank transactions are completed for each month end. The Multiple Currency Reconciliation Process explains the reconciliation of this unique transaction.

Petty Cash Reconciliation

  • Ensures that the monthly Petty Cash top is recorded and that the Expensify Report that keeps track of the petty cash spent is updated.

Revenue and Billing System Reconciliation

  • Ensures that the revenue information recorded in the books ties back to the record in the Billing System, or within reasonable differences (<5%). Any difference more than this is brought to the client’s attention and discussion.

Inter-companies Reconciliation

  • Ensures that the inter-companies balances are reconciled/matched before consolidation. This means that expenses and receipts are recorded in both books.