Bank statements come from the bank; the cash book is your record. Reconciling them is matching work an agent does well. It loads statements, matches them to cash book entries, works the unmatched items, drafts journals for bank charges and unrecorded receipts, and prepares the reconciliation. A person approves every journal and signs the reconciliation.
What is a bank-to-ledger reconciliation, and who owns it?
Each bank account has a cash account in the general ledger. The two should move together. They differ because of timing (payments sent but not yet cleared, receipts recorded but not yet credited), items the bank knows about first (charges, interest, direct debits, customer payments not yet applied), and errors on either side. The reconciliation explains every difference at a date.
The cash or treasury accountant owns it, often daily for main accounts and monthly for others. The financial controller reviews and signs monthly. Auditors treat cash as high risk because it is where theft and fraud become visible, or stay hidden.
What are the steps, and who acts at each one?
- Agent, depth 1: loads statements. From the bank feed, checking for gaps in statement numbers and duplicate imports.
- Agent, depth 1: loads cash book entries. From the ledger and from the receivables and payables sub-ledgers where payments are recorded first.
- Agent, depth 1: matches. By amount, date, reference and counterparty. One-to-one first, then one-to-many, such as a single bank receipt that settles several invoices.
- Agent, depth 2: classifies unmatched items. Timing (with expected clearing date), bank-originated items not yet recorded, apparent errors and unknowns.
- Agent, depth 2: drafts entries. Bank charges and interest as journals; unidentified receipts to a suspense account with the remittance details, pending allocation by receivables. Parked.
- Person, cash accountant: approves entries and resolves unknowns.
- Agent, depth 2: prepares the reconciliation. Bank balance, items in transit, unrecorded items, adjusted balance against ledger balance, with every item's age.
- Person, controller: reviews and signs.
| Step | The agent does | Depth | Stays with a person |
|---|---|---|---|
| Statements | Loads and checks continuity | 1 | Chasing missing statements |
| Cash book | Loads ledger and sub-ledgers | 1 | Nothing |
| Match | One-to-one, one-to-many | 1 | Approving complex matches |
| Classify | Labels unmatched | 2 | Unknowns |
| Entries | Drafts and parks | 2 | Approves |
| Reconciliation | Prepares | 2 | Controller signs |
Which controls matter, and what evidence do they leave?
Statement integrity. No gaps, no duplicates, opening equals prior closing. Evidence: a continuity check on each statement.
Read-only ledger access for matching. Matching needs to read the ledger, not change it. Grant read access as set out in giving an AI agent read access to your general ledger; drafting entries uses a separate park-only right.
Entries approved by a person. Evidence: approver identity on every journal.
Ageing from first appearance. An outstanding cheque that is reissued keeps its original date. Evidence: origin date per item.
Signed reconciliation. Evidence: signature and date.
Tested before live. Matching rules are run against past months with known answers before going live, as described in testing an AI agent before it touches the general ledger. Evidence: test results with the rule version.
What should you measure?
- Auto-match rate, as a count of items matched without a person, and how many were later reversed.
- Unreconciled items by age.
- Unidentified receipts in suspense, value and age.
- Days from period end to signed reconciliation.
- Bank charges recovered after the agent spots overcharges.
Where does it usually go wrong?
Amount-only matches. Two payments of the same amount on the same day are matched to each other's entries. Both look reconciled, both are wrong. Require a second field to agree, or send the match to a person.
Suspense becomes a home. Unidentified receipts go to suspense and stay there. Customers' payments sit unapplied, their accounts look overdue, and they get chased in error. Age suspense items and escalate.
Old reconciling items normalised. Uncleared payments from months ago are carried forward without question. Some are lost cheques; some may be payments that never happened. The agent should escalate items past an age limit by name.
Adjusting the ledger to the bank. A difference is posted to a sundry account to make the reconciliation balance. The agent must never draft a plug. Every entry has a cause.
Bank feeds trusted blindly. A feed that fails silently for a day makes the account look quiet. The continuity check on statement numbers and balances is what catches it, so never skip it to save time.
Payroll payments lumped. Net pay leaves as one bulk amount or many individual ones, depending on the bank. Matching needs the payroll payment file; see reconciling payroll to the general ledger for the other side of that check.
What does a month look like?
Take an illustrative account with 1,800 transactions in the month. The agent matches 1,740 on its own. Of the remaining 60, it identifies 25 bank charges and interest items and drafts two journals, 20 customer receipts with remittance details to be allocated by receivables, 12 supplier payments in transit, and 3 items it cannot explain, which go to the cash accountant first. The controller signs the reconciliation on the second working day.
Where Pryme fits
In Pryme, matching and drafting entries are separate capabilities, each certified on your own past reconciliations. Bank statements arrive as signed data from the bank and the ledger as sealed, so the reconciliation shows both sources side by side. Entries are held for the cash accountant and every match is filed. The finance bounds are in AI agents for finance.
Questions people ask
Can the agent allocate customer receipts to invoices?
That is cash application in receivables, a separate capability. The agent here identifies the receipt and passes remittance details to it.
How often should accounts be reconciled?
Main operating accounts daily, others at least monthly. Daily reconciliation is cheap with an agent and catches fraud sooner.
What about accounts in other currencies?
Reconcile in the account currency first. Revaluation for reporting is a separate step, done after the account is reconciled, so that exchange differences are not mistaken for breaks.