Why reconcile every month
A management report is only trusted while its figures agree with the accounts, or while any difference is understood. A short monthly reconciliation keeps it that way. It also catches problems early, such as a new customer that was never mapped or a feed that stopped updating.
The checks below are a starting point. Each business will add its own, and the agreed definitions decide what counts as a match.
Totals and cut-off
- Total sales for the month in the report agree with the ledger, on the same basis for VAT, credit notes and currency.
- The report uses the agreed date for the period, such as invoice date or posting date.
- Transactions posted after month-end for the closed month are either included or listed.
- The number of invoices and credit notes in the report agrees with the source system.
Credit notes, returns and adjustments
- Credit notes and returns are treated the way the definition says: netted off or shown separately.
- Rebates and discounts posted outside the invoice are included where the definition requires them.
- Manual journal adjustments that affect sales are known and explained.
Data quality
- No duplicate transactions, for example from loading the same export twice.
- Every transaction has a known customer, product and, where used, sales representative.
- New customers and products created during the month are mapped to the right groups.
- Data feeds and exports refreshed when expected and cover the whole period.
Record what remains
Some differences are expected and correct, such as timing differences between dispatch and invoicing. List each remaining difference with its amount and reason, and keep the list with the month's report. Next month, check whether last month's items have cleared.
When the same check is done the same way every month, it can be automated so that the report shows the reconciliation result alongside the figures, and anything unusual is visible before the report is issued.