Bank reconciliation: matching, adjustments, and audit evidence

Accounting • Controls • Month-end close

Bank reconciliation is a control, not a clerical task. When reconciliation is weak, businesses can’t trust cash balances, and fraud or errors stay hidden. When reconciliation is strong, month-end close becomes predictable and audits become easier.

This guide outlines a practical reconciliation process and what evidence you should keep.

What you are trying to prove

• Your system’s cash/bank ledger matches the bank statement for the same period.
• Every difference is explainable: timing, bank fees, reversals, chargebacks, or corrections.
• Approvals and audit logs exist for adjustments.

Matching patterns that work

1) Exact match

Amount and date align. These are low-effort and should be automated where possible.

2) Near match (timing difference)

Payment appears a day later in the bank due to settlement. Capture a reference and mark as timing difference.

3) Split/combined match

One bank deposit may represent multiple receipts, or one receipt may settle across multiple bank entries. Use matching rules and evidence links.

Preparation: make matching easier

Most reconciliation pain comes from upstream inconsistencies: unclear references, missing receipts, and multiple systems representing the same payment differently. Before you reconcile, make sure your inputs are clean.

• Consistent references: use invoice numbers and customer references consistently on receipts and bank descriptions where possible.
• Clear bank account mapping: ensure each bank account in the statement maps to the correct ledger account.
• Document discipline: record receipts when cash is received, not at month-end.
• Controlled edits: limit who can edit receipts and bank entries using RBAC and approvals where configured.

Common mismatch patterns (and fixes)

Duplicate receipts

Duplicates happen when two teams record the same payment, or when payment confirmations arrive twice. Prevent this with clear references and periodic duplicate checks.

Chargebacks and reversals

Chargebacks often appear days after the original receipt. Treat them as controlled adjustments with evidence links, and ensure reporting shows both the receipt and the reversal.

Bank fees and withheld charges

Bank charges reduce the deposited amount, so the bank entry will not match the invoice total. Record fees as adjustments with the statement reference.

Partial payments

When customers pay in parts, the bank statement will show multiple entries. Your customer ledger should support partial receipts so aging remains accurate.

Timing differences

Settlement delays create legitimate timing differences. Record them explicitly so teams do not “force match” by editing dates or amounts.

Reconciliation cadence and ownership

Reconciliation should be a routine, not a crisis. Teams that reconcile weekly (or even daily for high volume) reduce end-of-month surprises and improve fraud detection.

• High volume: reconcile daily or every 2–3 days to keep unmatched items small.
• Medium volume: reconcile weekly and review exceptions in a short meeting.
• Low volume: reconcile at least monthly, but still review large or unusual entries promptly.

Ownership matters: one team should own reconciliation, while exceptions route to sales, collections, or operations for clarification.

Adjustments: treat them like mini-accounting entries

Adjustments should be controlled because they change financial statements. Examples include bank charges, interest, reversals, and corrections.

• Require approvals for adjustments above a threshold.
• Document the reason and attach statement evidence.
• Lock periods after close to prevent silent back-dated edits.

FAQ

Should reconciliation be done before period close?

Yes. Reconciliation is a prerequisite for a confident close. Once reconciliation and reviews are complete, use period lock controls (where configured) to keep prior months stable.

How do I make audits easier?

Keep evidence linked: bank statements, reconciliation reports, adjustment documents, and audit logs. Review exception reports regularly instead of only during audit season.

What is the best first metric to track?

Track unmatched bank entries and their aging. A small, stable unmatched list is a sign your process is working.

Audit evidence checklist

• Bank statement for the period
• Reconciliation report showing matched/unmatched items
• Supporting documents for adjustments (fees, interest, reversals)
• Audit logs showing who performed matches and approvals

Unmatched items playbook

Every team accumulates unmatched items. The goal is to keep the backlog small and aging low. A simple playbook is:

• Group by type: deposits, withdrawals, fees, reversals, chargebacks.
• Group by owner: sales (customer issues), operations (delivery/returns), finance (fees and postings).
• Set an SLA: for example, “no unmatched item older than 14 days”.
• Review weekly: a 20-minute review prevents month-end chaos.

When backlog is visible and owned, reconciliation becomes predictable instead of a month-end emergency.

Maker-checker controls for adjustments

Adjustments are a high-risk area because they can be used to hide mistakes or fraud. Treat adjustments like mini journal entries with controls.

• Separate duties: the person who records an adjustment should not be the only approver for it.
• Require reasons: capture a short reason and link to statement evidence.
• Thresholds: route large adjustments to senior approvers automatically.
• Period lock: once the month is closed, corrections should be posted in the current period with clear references.

KPIs to monitor

• Unmatched count and aging: number of unmatched items and oldest age.
• Adjustment volume: total adjustments by type (fees, reversals, chargebacks).
• Close duration: days to complete reconciliation and close.
• Reconciliation drift: changes made after close (should trend to zero).

To automate these KPI reviews, use Reporting & Audit with report schedules and history.

Implementation checklist

• Ensure bank accounts are mapped correctly in the ledger.
• Define matching rules and train the team on how to handle splits and timing differences.
• Define approval thresholds for adjustments and enforce maker-checker separation.
• Schedule a weekly unmatched-items review and assign owners for each mismatch category.
• Lock the period after month-end close to prevent historical drift (where configured).

If your team wants a structured way to report reconciliation issues and improvement requests, consider a tenant Support Portal workflow.

Where NAViCalC fits

NAViCalC supports accounting workflows such as bank reconciliation, journal entries, and period controls. Combine this with Reporting & Audit to keep evidence accessible across teams.

How reconciliation connects to billing and payables

Reconciliation improves when upstream processes are disciplined. Two areas matter most:

• Billing/AR: invoices and receipts should be posted promptly so deposits have clear references.
• Payables/AP: vendor payments and bank charges should be recorded with evidence links and approvals where needed.

When billing and operations share one system, it becomes easier to trace a bank statement line back to an invoice, receipt, vendor bill, or adjustment.

Mini case study: chargeback handling

A chargeback appears in the bank statement 10 days after a customer payment. Teams often miss it until month-end, then scramble to explain a mismatch.

• Record the chargeback as a controlled adjustment with evidence links.
• Link it back to the original invoice/receipt so the customer ledger remains consistent.
• Route the exception to the account owner for follow-up and dispute handling.

When this process is repeatable, reconciliation becomes faster and the business learns from patterns instead of repeating the same surprises.

Include chargebacks, reversals, and fees in your close checklist, then enable period lock after sign-off (where configured) so historical cash numbers do not drift.

Get started

Review pricing and explore Accounting & Finance features.

Start by reconciling one bank account end-to-end, then scale the cadence across accounts.