Reconciliation

Complete guide to reconciliation procedures essential for period-end close.

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Overview

RECONCILIATION CATEGORIES
═══════════════════════════════════════════════════════════════════

CASH & BANK              SUBLEDGERS              INVENTORY
──────────               ──────────              ─────────
├── Bank Accounts        ├── Accounts Receivable ├── Valuation
├── Credit Cards         ├── Accounts Payable    ├── Negative Inventory
└── Petty Cash           └── Fixed Assets        └── Cost Accounting
                                    │
                                    ▼
                         ┌───────────────────┐
                         │   GL BALANCES     │
                         │  Must all match   │
                         └───────────────────┘

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Bank Reconciliation

Process Overview

BANK RECONCILIATION FLOW
───────────────────────────────────────────────────────────

Bank Statement              NetSuite Register
──────────────              ─────────────────
Beginning Balance ────────► Beginning Balance  ✓ Match

(+) Deposits     ────────► (+) Deposits       ✓ Match
(-) Checks/Pmts  ────────► (-) Checks/Pmts    ✓ Match
(±) Bank Fees    ────────► (±) Bank Fees      Record if missing
(±) Interest     ────────► (±) Interest       Record if missing

Outstanding:
  - Checks not cleared     ────► Identify
  - Deposits in transit    ────► Identify

Ending Balance   ────────► Ending Balance     ✓ Match + Outstanding

Bank Reconciliation Steps

RECONCILE BANK ACCOUNT
───────────────────────────────────────────────────────────

Navigation: Transactions > Bank > Reconcile Bank Statement

1. Select Account and Statement Date:
   ┌────────────────────────────────────────────────────┐
   │ Account:           Operating Account - Chase       │
   │ Statement Date:    01/31/2026                      │
   │ Statement Balance: $125,450.00                     │
   └────────────────────────────────────────────────────┘

2. Mark cleared transactions:
   ☑ Check #1001    01/05/26    $500.00     Cleared
   ☑ Check #1002    01/10/26    $1,200.00   Cleared
   ☐ Check #1003    01/28/26    $800.00     Outstanding
   ☑ Deposit        01/15/26    $5,000.00   Cleared

3. Enter bank adjustments:
   Bank Fee:     $25.00
   Interest:     $12.50

4. Review reconciliation status:
   Statement Balance:        $125,450.00
   GL Balance:              $126,250.00
   Less: Outstanding Checks:   ($800.00)
   ─────────────────────────────────────
   Difference:                    $0.00  ✓

5. Click "Reconcile"

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Accounts Receivable Reconciliation

AR Aging to GL

AR RECONCILIATION
───────────────────────────────────────────────────────────

Step 1: Run AR Aging Report
  Reports > Customers > A/R Aging

Step 2: Compare to GL
  Reports > Financial > Trial Balance
  Filter: 1200 Accounts Receivable

┌─────────────────────────────────────────────────────────┐
│ AR AGING SUMMARY           │ GL ACCOUNT 1200           │
├─────────────────────────────┼───────────────────────────┤
│ Current:      $50,000      │                           │
│ 1-30 Days:    $25,000      │                           │
│ 31-60 Days:   $10,000      │                           │
│ 61-90 Days:    $5,000      │                           │
│ 90+ Days:      $2,500      │                           │
├─────────────────────────────┼───────────────────────────┤
│ TOTAL:        $92,500      │ Balance:       $92,500    │
└─────────────────────────────┴───────────────────────────┘
                    ✓ RECONCILED

Common AR Discrepancies

Issue	Cause	Resolution
Aging > GL	Unapplied credit memo	Apply credit to invoice
GL > Aging	Missing invoice	Review transaction postings
Date mismatch	Transaction in wrong period	Correct posting period
Subsidiary mismatch	Wrong entity	Correct subsidiary assignment

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Accounts Payable Reconciliation

AP Aging to GL

AP RECONCILIATION
───────────────────────────────────────────────────────────

Step 1: Run AP Aging Report
  Reports > Vendors > A/P Aging

Step 2: Compare to GL
  Reports > Financial > Trial Balance
  Filter: 2000 Accounts Payable

┌─────────────────────────────────────────────────────────┐
│ AP AGING SUMMARY           │ GL ACCOUNT 2000           │
├─────────────────────────────┼───────────────────────────┤
│ Current:      $35,000      │                           │
│ 1-30 Days:    $15,000      │                           │
│ 31-60 Days:    $8,000      │                           │
│ 61-90 Days:    $2,000      │                           │
│ 90+ Days:        $500      │                           │
├─────────────────────────────┼───────────────────────────┤
│ TOTAL:        $60,500      │ Balance:       $60,500    │
└─────────────────────────────┴───────────────────────────┘
                    ✓ RECONCILED

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Inventory Reconciliation

Inventory Valuation

INVENTORY VALUATION RECONCILIATION
───────────────────────────────────────────────────────────

Step 1: Run Inventory Valuation Report
  Reports > Inventory > Inventory Valuation

Step 2: Compare to GL Inventory Account
  Reports > Financial > Trial Balance
  Filter: 1400 Inventory Asset

┌─────────────────────────────────────────────────────────┐
│ INVENTORY VALUATION        │ GL ACCOUNT 1400           │
├─────────────────────────────┼───────────────────────────┤
│ Raw Materials:   $100,000  │                           │
│ WIP:              $50,000  │                           │
│ Finished Goods:  $150,000  │                           │
├─────────────────────────────┼───────────────────────────┤
│ TOTAL:          $300,000   │ Balance:      $300,000    │
└─────────────────────────────┴───────────────────────────┘
                    ✓ RECONCILED

Negative Inventory Review

[!IMPORTANT] Negative inventory MUST be resolved before period close to ensure accurate COGS and valuation.

REVIEW NEGATIVE INVENTORY
───────────────────────────────────────────────────────────

Navigation: Transactions > Inventory > Review Negative Inventory
  OR via Period Close Checklist

The page shows items with negative quantities:

┌─────────────────────────────────────────────────────────────────┐
│ Item          │ Location    │ On Hand │ Committed │ Available  │
├───────────────┼─────────────┼─────────┼───────────┼────────────┤
│ Widget-A      │ Warehouse 1 │    -5   │     0     │     -5     │
│ Part-123      │ Warehouse 2 │   -10   │     2     │    -12     │
└─────────────────────────────────────────────────────────────────┘

Common Causes:
  - Fulfillment before receipt completion
  - Receipt deleted after fulfillment
  - Data import errors
  - Transaction date errors

Resolution Steps:
  1. Identify source transactions
  2. Enter missing receipts
  3. Correct transaction dates
  4. Run inventory adjustment if needed

Inventory Cost Accounting

INVENTORY COST ACCOUNTING TASK
───────────────────────────────────────────────────────────

When: After resolving negative inventory

Navigation: Period Close Checklist > Inventory Cost Accounting

Process:
1. System recalculates inventory costs
2. Updates COGS for affected transactions
3. Adjusts inventory valuation

┌────────────────────────────────────────────────────────┐
│ Inventory Cost Accounting Run                          │
│                                                        │
│ Period:        Jan 2026                                │
│ Items Processed: 1,542                                 │
│ Transactions Updated: 328                              │
│ COGS Adjustments: $2,450.00                           │
│                                                        │
│ Status: ✓ Complete                                    │
└────────────────────────────────────────────────────────┘

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Fixed Assets Reconciliation

FAM to GL Reconciliation

FIXED ASSETS RECONCILIATION
───────────────────────────────────────────────────────────

Step 1: Run Fixed Asset Register
  Reports > Fixed Assets > Fixed Asset Register

Step 2: Compare to GL Accounts

┌─────────────────────────────────────────────────────────┐
│ FIXED ASSET REGISTER       │ GL ACCOUNTS               │
├─────────────────────────────┼───────────────────────────┤
│ Equipment - Cost: $250,000 │ 1510: $250,000           │
│ Accum Depr:      ($125,000)│ 1610: ($125,000)         │
│ Net Book Value:   $125,000 │ Net:  $125,000           │
├─────────────────────────────┼───────────────────────────┤
│ Vehicles - Cost:  $150,000 │ 1520: $150,000           │
│ Accum Depr:       ($90,000)│ 1620: ($90,000)          │
│ Net Book Value:    $60,000 │ Net:   $60,000           │
└─────────────────────────────┴───────────────────────────┘
                    ✓ RECONCILED

Before Reconciling:
  □ Run depreciation for the period
  □ Process all asset disposals
  □ Complete asset transfers

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GL to Subledger Reconciliation

Master Reconciliation Worksheet

GL TO SUBLEDGER RECONCILIATION SUMMARY
═══════════════════════════════════════════════════════════════════

Period: January 2026

Account         GL Balance    Subledger    Difference    Status
───────         ──────────    ─────────    ──────────    ──────
1100 Cash       $125,450      $125,450     $0            ✓
1200 AR         $92,500       $92,500      $0            ✓
1400 Inventory  $300,000      $300,000     $0            ✓
1500 Fixed Ast  $400,000      $400,000     $0            ✓
2000 AP         $60,500       $60,500      $0            ✓
2100 Accrued    $15,000       N/A          N/A           JE Only

All accounts reconciled as of 02/05/2026

Prepared by: ____________  Reviewed by: ____________

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Reconciliation Automation

Saved Searches for Reconciliation

// AR Aging vs GL Reconciliation Search

Type: Transaction

Criteria:
- Account = 1200 Accounts Receivable
- Main Line = true
- Status = Open

Results:
- Customer
- Document Number
- Amount Remaining
- Date

Summary:
- Sum: Amount Remaining

Compare to: GL Balance for 1200

Scheduled Reports

Report	Frequency	Recipients
Bank Reconciliation Status	Weekly	Controller
AR Aging Summary	Weekly	AR Manager
AP Aging Summary	Weekly	AP Manager
Inventory Valuation	Monthly	Inventory Manager
Negative Inventory	Daily	Warehouse Manager

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Best Practices

Reconciliation Procedures

Practice	Recommendation
Timing	Complete reconciliation before locking
Documentation	Save reconciliation worksheets
Sign-off	Require preparer and reviewer signatures
Frequency	Bank - daily; Subledgers - weekly
Variance threshold	Investigate differences > $100

Common Issues

Issue	Cause	Resolution
Cash difference	Unrecorded bank fees	Create journal entry
AR mismatch	Unapplied payments	Apply to open invoices
AP mismatch	Duplicate vendor	Merge vendors
Inventory difference	Negative inventory	Resolve per above
Fixed asset mismatch	Missing depreciation	Run depreciation

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Related Topics

• Adjustments - Adjusting entries
• Month-End Close - Complete checklist
• Period Close Checklist - NetSuite tasks