A balance sheet reconciliation template proves that a general ledger balance is supported by an independent source at period end. It records the ledger balance, the supporting balance, each reconciling item with its age and evidence, the unexplained difference, and the preparer and reviewer. An AI agent can prepare it; a person reviews and signs.
What should a balance sheet reconciliation prove?
That the number on the balance sheet is real, complete and correctly valued. For each account, someone compares the ledger to something outside the ledger: a bank statement, a sub-ledger, a fixed asset register, a counterparty confirmation, a payroll report. Differences are explained item by item, and anything unexplained is either cleared or escalated.
The general idea is covered in what reconciliation is. This template is for the wider balance sheet: prepayments, accruals, suspense, intercompany, payroll liabilities, VAT or sales tax. Bank accounts follow a slightly different layout, set out in the bank reconciliation template.
When should you prepare one?
Every period-end for high-risk accounts, and at least quarterly for the rest. Classify each account by risk first: suspense and clearing accounts, intercompany and anything with manual journals are high risk. Low-risk accounts with no activity can be reconciled less often, but the decision should be written down.
An agent can prepare reconciliations as soon as sub-ledgers close. Whether it should, and where the boundaries sit, is discussed in whether an AI agent can prepare balance sheet reconciliations.
How do you fill in each field?
- Supporting source must be independent of the ledger entry being tested. A sub-ledger that feeds the ledger automatically is acceptable only if the feed itself is controlled.
- Reconciling items each need a description, amount, origination date, evidence and a planned clearing action. "Timing" is not a description.
- Age is calculated from the origination date. Items older than your threshold, often 60 or 90 days, go on a separate list for the reviewer.
- Unexplained difference must be shown even if it is zero. If it is not zero, the reconciliation is not complete; it is a finding.
- Preparer for an agent should record the agent name, its brief version and the sources it read.
The balance sheet reconciliation template
Header
| Field | Entry |
|---|---|
| Entity | |
| Account number and name | |
| Account risk rating | High, medium, low |
| Period end | |
| Ledger balance | |
| Supporting source | Document or system name |
| Supporting balance | |
| Total reconciling items | |
| Unexplained difference | Must be shown, even if zero |
| Prepared by | Person, or agent name and brief version |
| Sources read | Systems and reports, with provenance |
| Reviewed by | Named person |
| Review date |
Reconciling items
| Item | Description | Amount | Origination date | Age (days) | Evidence | Clearing action | Owner | Target date |
|---|---|---|---|---|---|---|---|---|
A filled example
A hypothetical services group, prepayments account at quarter end.
| Field | Entry |
|---|---|
| Account | 1410 Prepayments |
| Risk rating | Medium |
| Ledger balance | 84,000 |
| Supporting source | Prepayments schedule in the ledger's amortisation module |
| Supporting balance | 81,500 |
| Total reconciling items | 2,500 |
| Unexplained difference | 0 |
| Prepared by | Close agent, brief v4, depth 2 |
| Sources read | Ledger (sealed), amortisation module (sealed), insurance invoice PDF (external) |
| Reviewed by | Group financial controller |
| Item | Description | Amount | Origination | Age | Evidence | Action |
|---|---|---|---|---|---|---|
| 1 | Insurance renewal invoice posted to prepayments, not yet added to the schedule | 3,000 | 28th of final month | 3 | Invoice, posting journal | Add to schedule, 12-month release |
| 2 | Software licence fully amortised in schedule, final month's release journal not posted | (500) | Final day | 0 | Schedule extract | Post release journal |
The agent flagged that item 1's amount came from an external invoice only, and the reviewer checked it against the broker's confirmation before signing. For a fuller walkthrough of the process around this template, see how to prepare balance sheet reconciliations with an AI agent.
Questions people ask
What is an acceptable unexplained difference?
Zero, in principle. Some firms allow a small rounding tolerance set in policy. Anything above it should be investigated before sign-off, not carried forward.
Can the agent clear reconciling items itself?
It can draft the correcting journal for a person to post. Posting it would mean the same agent prepared the reconciliation and fixed the difference, which removes the separation a reviewer relies on.
How should old reconciling items be handled?
List them separately with an owner and a date. If an item ages past your threshold twice, escalate it to the controller. Old items are where errors and losses hide, as the finance guide, books you can audit, notes.