How to prepare balance sheet reconciliations with an AI agent

Make the agent the preparer and a named account owner the reviewer. For each balance sheet account, the agent pulls the ledger balance, finds independent support, lists reconciling items with their age and explanation, and drafts any correcting journal. The owner reviews and signs. High-risk accounts get a second reviewer, and the agent never signs its own work.

What is a balance sheet reconciliation, and who signs it?

A balance sheet reconciliation proves that an account's balance in the general ledger is supported by something outside it: a bank statement, a subledger, a fixed asset register, a third-party confirmation, a schedule of accruals with invoices behind them. Differences are listed as reconciling items, each with an explanation and a plan to clear it.

Each account has an owner, usually the accountant responsible for that area. The financial controller sets the policy: which accounts are reconciled monthly and which quarterly, materiality thresholds, how old an item may get, and who reviews. Most policies rank accounts by risk; cash, receivables, payables, intercompany and suspense are usually high risk.

Whether an agent can do this work at all is answered in can an AI agent prepare balance sheet reconciliations. Here is how.

What does the agent prepare?

1. Agent, depth 1: pulls balances and support. Ledger balance at period end and the support named in the account's reconciliation profile.
2. Agent, depth 1: compares and finds differences. Totals first, then line-level matching where the support allows.
3. Agent, depth 2: explains reconciling items. Timing (cash in transit, invoices received but not posted), errors (wrong account, wrong amount), and unknowns. Each item gets its origin date, not today's.
4. Agent, depth 2: drafts correcting journals. For clear errors, parked for approval.
5. Agent, depth 2: completes the reconciliation form. In the format your policy uses; a balance sheet reconciliation template works as a starting point.
6. Person, account owner: reviews and signs. Checks the support is independent, challenges explanations and approves journals.
7. Person, second reviewer: signs high-risk accounts. Usually the controller.

What does a prepared reconciliation look like?

Take an illustrative accruals account with a ledger balance of 240,000. The agent pulls the accruals schedule, finds 225,000 of listed accruals with a purchase order or contract behind each, and a difference of 15,000. Tracing it, the agent finds an accrual for a consultancy invoice that was then posted to payables last week without the accrual being reversed. It lists that as an error, drafts the reversing journal, and notes that the accrual is four weeks old. The owner confirms with the budget holder that the invoice covers the same work, approves the journal and signs.

What does the named person approve, and what does the evidence show?

The owner approves three things: that the support is real and independent, that each reconciling item is explained truthfully, and that any correcting journal is right. Their signature means "I would defend this balance to an auditor".

Profile per account. Each account has a reconciliation profile: support source, frequency, risk rating, owner and reviewer. Evidence: the profile version on the reconciliation.

Independent support. The agent states where support came from and its source class. A bank statement is signed by the bank; a subledger is your own sealed system; a schedule the owner typed is declared. Evidence: source on every reconciliation.

Item ageing from origin. An item that is reversed and rebooked keeps its original date. Evidence: origin date on each item.

Sign-off timing. Reconciliations signed by the day the policy sets. Evidence: timestamps.

Agent never signs. Evidence: signatures always carry a person's identity.

Where does it usually go wrong?

Circular support. The "support" is a report generated from the same ledger. It will always agree, and proves nothing. The agent must flag any support that comes from the account being reconciled, and the profile should forbid it.

Plugged differences. A small unexplained difference is labelled "rounding" month after month. The agent should accumulate these and show the total, not just this month's.

Stale items normalised. Reconciling items over ninety days stay on the list because they always have. The agent should escalate items past the age limit to the controller by name, every month.

Zero-balance accounts skipped. An account with a nil balance may have large offsetting movements. Reconcile activity, not just the balance, for high-risk accounts.

Reviewers sign faster. Agent drafts look complete. Keep a monthly sample where the controller re-performs one reconciliation in full.

Specialist accounts treated as ordinary. Intercompany needs both sides; cash needs the bank; client money has its own rules. Use dedicated playbooks: intercompany reconciliations, bank reconciliations and client money reconciliations.

What should you measure?

• Reconciliations signed on time, by risk rating.
• Reconciling items past the age limit, count and value.
• Agent explanations rejected by owners.
• Correcting journals proposed and approved.
• Audit findings on reconciled accounts.

Where Pryme fits

In Pryme, preparing reconciliations and drafting correcting journals are separate capabilities, certified on your own past reconciliations. The Pryme Context Protocol stamps each piece of support with its provenance, so a reviewer sees immediately whether a balance is backed by a bank, a subledger or a typed schedule. Journals are held and every reconciliation is filed. Wider bounds are in AI agents for finance.