Balance Sheet Reconciliation Checklist Template

What the Balance Sheet Reconciliation Checklist Covers

1. 1
   Phase 1 — Pre-Close

   Phase 1: Build the Account List, Owners & Risk Ratings

   7 tasks

   An account that isn’t on the list doesn’t get reconciled. Build the list from the trial balance, not from last month’s file, and do it before period end.

   • Confirm the period, the deadline and the sign-off roles — the period-end date, the preparation and review deadlines, and the controller who approves the month
   • Export every balance sheet account from the trial balance — every account with a balance or a movement in the period, including accounts that ended the month at zero
   • Assign a preparer and a reviewer to each account — never the same person for one account, and ideally a reviewer who does not post routine entries to it
   • Rate each account high, medium or low risk — by transaction volume, the judgement in the balance, its size and the errors found in past reconciliations
   • Set each account’s reconciliation frequency from its rating — high and medium risk monthly; low-risk accounts with little activity can move to a quarterly cycle
   • Confirm the variance and ageing thresholds for reconciling items — the amount and the age at which an item must be escalated rather than rolled forward, set by your team
   • Send the reconciliation calendar to every preparer and reviewer — with the preparation and review due dates for each account, counted from period end
2. 2
   Phase 2 — Period End

   Phase 2: Close the Subledgers & Gather Evidence

   6 tasks

   Every reconciliation agrees to the same trial balance. Run it once the subledgers are closed and keep that version.

   • Confirm every subledger is closed for the period — receivables, payables, fixed assets, payroll and inventory posted to the general ledger, with nothing left in unposted batches
   • Run the period-end trial balance — save the version every reconciliation agrees to, with the date and time it was run
   • Roll forward last month’s reconciliations — the opening balance on each one equals last month’s reviewed closing balance
   • Carry forward last month’s open reconciling items — each one listed with its original date, so its age is visible
   • Collect the standard evidence for each account — the statement, subledger report, register or schedule the table below lists for its account type
   • Quarter-end only: add the low-risk accounts on a quarterly cycle — so every balance sheet account is reconciled at least once a quarter
3. 3
   Phase 3 — Reconcile

   Phase 3: Reconcile Cash, Receivables & Other Assets

   5 tasks

   Agree each balance to evidence from outside the ledger. A reconciliation that agrees the ledger to itself proves nothing.

   • Reconcile cash and bank balances — agree each account’s ledger balance to its reviewed bank reconciliation, and petty cash to a count
   • Reconcile trade receivables — agree the aged debtors report to the receivables control account, and flag balances that may need a provision
   • Reconcile prepayments and other debtors — agree the prepayment schedule to the ledger, with each item’s invoice and release profile
   • Reconcile inventory, where you hold it — agree the stock valuation report or count results to the ledger, including goods in transit and the obsolete stock provision
   • Reconcile fixed assets — agree cost and accumulated depreciation by asset class to the fixed asset register, with this period’s additions and disposals
4. 4
   Phase 4 — Reconcile

   Phase 4: Reconcile Liabilities, Equity & Clearing Accounts

   8 tasks

   • Reconcile trade payables — agree the aged creditors report to the payables control account, and reconcile statements from your largest suppliers
   • Reconcile accruals and deferred income — agree each item to a schedule that shows its basis, and check last month’s accruals reversed
   • Reconcile payroll liabilities — agree payroll tax, pension and net pay control accounts to the payroll reports and the payments that cleared them
   • Reconcile tax balances — agree VAT or sales tax control accounts to the return workings, and the corporate tax balance to the tax computation
   • Reconcile credit card and loan balances — agree card liabilities to the card statements and each loan to the lender’s statement
   • Reconcile intercompany balances — agree each balance to the counterparty’s confirmation at the same date
   • Reconcile equity — agree share capital and reserves to the share register and board minutes, and roll forward retained earnings
   • Clear suspense and clearing accounts — analyse every item and clear it to the right account, aiming for a nil balance at period end
5. 5
   Phase 5 — Resolve

   Phase 5: Investigate Reconciling Items & Post Adjustments

   6 tasks

   Test every item against the thresholds set in Phase 1. An item over either one adds Phase 7 to this month’s checklist.

   • Classify every reconciling item — timing difference, error to correct, unsupported balance or item still under investigation
   • Test each item against the variance and ageing thresholds — record any item over the variance threshold or older than the ageing limit
   • Prepare adjusting journals for errors and unsupported balances — each one referenced to its reconciliation, never a plug to suspense
   • Approve journals over the threshold before they post — by someone other than the person who prepared them
   • Re-run the trial balance and update each reconciliation — once the journals have posted, confirm the unexplained difference on every account is zero
   • Record an owner and an expected clearing date for every open item — so next month’s preparer knows what should have happened
6. 6
   Phase 6 — Review

   Phase 6: Preparer Sign-Off & Independent Review

   5 tasks

   Assign review to someone who did not prepare the reconciliation. The reviewer works from the evidence, not from the preparer’s summary.

   • Preparer signs off each reconciliation — with the date, the balance agreed and the evidence attached
   • Reviewer agrees each balance to the trial balance and the evidence — ticking the figures back to the source documents
   • Reviewer challenges aged, round-sum and unexplained items — and asks whether each one will ever clear
   • Reviewer approves or returns each reconciliation — a reviewer never approves an account they prepared
   • Clear review points and resubmit returned reconciliations — the reviewer approves each one once its points are closed
7. 7
   Phase 7 — Only If Needed

   Phase 7: Escalate Aged & Over-Threshold Items

   4 tasks

   Shown only when Phase 5 records an item over the variance threshold or older than the ageing limit. In a clean month this phase stays hidden.

   • Log each escalated item for the controller — account, amount, age, cause and what has been tried so far
   • Agree an action and a clearing date for each item — correct it, chase the third party who holds the answer, or propose a write-off
   • Approve any write-off of an unreconciled balance — by the controller, within your authority limits, with the journal referenced
   • Track each item until it clears — and report any still open at the next month end to the finance director
8. 8
   Phase 8 — Sign-Off

   Phase 8: Status Summary & Controller Sign-Off

   5 tasks

   The controller signs off the month from one summary. The checklist halts until that approval is given.

   • Prepare the reconciliation status summary — for each account: preparer, reviewer, status, balance, open items and the age of the oldest item
   • Report open reconciling items by age — the number and value of items at 0–30, 31–60, 61–90 and over 90 days
   • Controller reviews the summary and approves the month’s reconciliations — Approved, Approved with conditions or Not approved; the checklist halts until it is answered
   • Lock the period and archive the reconciliations — the period locked in the accounting system, and each reconciliation filed with its evidence and sign-offs
   • Update the account list and risk ratings for next month — new and closed accounts, and any rating this month’s errors should change