What is the process of account reconciliation for vendors, customers, and the general ledger (GL)?

Question

Accepted Answer

Account reconciliation ensures accuracy between vendor, customer, and GL records to maintain financial integrity.

1. Gather all relevant documents: invoices, payment records, and statements from vendors and customers.
2. Compare vendor statements with internal records to identify discrepancies, such as missing invoices or incorrect amounts.
3. For customer accounts, verify payments received against invoices issued to ensure all transactions are recorded accurately.
4. Reconcile the general ledger by matching account balances with subsidiary ledgers, ensuring all entries are accounted for.
5. Investigate and resolve discrepancies by communicating with vendors or customers to clarify any differences.
6. Document the reconciliation process and maintain records for audit purposes.

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