A balance you can't reconcile is a number you can't defend.
Every balance sheet account needs an owner, a reconciliation to independent evidence each period, an explanation for every reconciling item, and a reviewer sign-off. Rate accounts by risk so high-risk ones get detailed monthly reconciliations, and treat old or unexplained items as findings to clear, not balances to carry forward.
Start from the trial balance. Every balance sheet account, including zero-balance ones that had activity, gets a named preparer and a named reviewer. Accounts without an owner are the ones that go wrong.
Consider the size of the balance, the volume of transactions, how much judgement is involved, and its history of errors. A simple high, medium and low rating is enough:
| Account | Independent evidence |
|---|---|
| Bank | Bank statement |
| Receivables and payables | Sub-ledger ageing, supplier statements |
| Accruals and prepayments | Supporting schedules with calculations |
| Fixed assets | Fixed asset register |
| Payroll liabilities | Payroll reports and tax filings |
| Intercompany | The other entity's matching balance |
Every reconciliation should show: the general ledger balance, the evidence balance, each reconciling item with its date, description, owner and planned action, the remaining difference (which must be zero), and preparer and reviewer sign-off with dates.
A reconciling item is something to fix. Set a rule, for example: items older than 60 days are escalated to the financial controller, and items older than 90 days need a write-off or correction decision. Suspense accounts should be cleared to zero every month.
The reviewer checks the evidence, not just the arithmetic: that the evidence balance is real, that items are genuine and current, and that nothing has been parked. Review should happen within a few days of month end, not weeks later.
Measure reconciliations completed on time, the number and value of items older than 90 days, and accounts with unexplained differences. Falling numbers mean the process is working. The most common failures are covered in balance sheet reconciliation errors.
The process is the same in the UK and US. US public companies test reconciliations as key controls under Sarbanes-Oxley. UK auditors rely on them heavily too, and the evidence standard is what they will ask to see.
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The Balance Sheet Reconciliation Library covers the balance sheet with nine working papers: a known error blocks sign-off, every supported balance needs an evidence reference and every aged item needs an owner and a next action. Excel, no macros, one-time price.
If they had activity in the period, yes. A zero balance can hide two offsetting errors.
A specific, explained difference between the ledger and the evidence, such as a payment in transit, with an owner and a date by which it should clear.
Set a rule and enforce it. Many teams escalate at 60 days and require a decision at 90.
Someone more senior than the preparer who doesn't post transactions to that account, usually the financial controller for high-risk accounts. The reviewer should check the evidence and the age of reconciling items, not just that the difference is zero.
Last updated 18 October 2026. General guidance for finance teams; check it against your own policies, systems and local rules.