What is Reconciliation?
Reconciliation is the accounting process of comparing two sets of records to verify that they are consistent, accurate, and complete. It is one of the most fundamental detective controls in the internal control framework, ensuring that what is recorded in one system matches what is recorded in another.
Common types of reconciliation
- Bank reconciliation: comparing the company's cash ledger balance to the bank statement — the most universal reconciliation control
- Account reconciliation: matching the general ledger balance of an account to a sub-ledger, supporting schedule, or third-party statement
- Intercompany reconciliation: eliminating transactions between related entities before consolidation — critical for multi-entity groups
- Payment reconciliation: matching payments made or received to the invoices or obligations they settle
How reconciliation works as an internal control
Reconciliation controls are detective in nature — they identify discrepancies after transactions have been recorded. Effective reconciliation requires: preparation by someone independent from the person who recorded the original transactions, timely completion (monthly at minimum), management review and sign-off, and documented investigation of exceptions.
Reconciliation and Supervizor
Supervizor automatically flags reconciliation exceptions — intercompany imbalances, unreconciled items aged beyond thresholds, and sub-ledger to GL variances — across 100% of accounts continuously. The Investigation & Reporting module tracks each exception through to resolution with a full audit trail.
Related Supervizor pages
→ Investigation & Reporting — exception tracking and resolution
→ AI & Controls — reconciliation controls
→ Finance transformation — improving financial close quality