GL Account Reconciliation Checklist: How to Reconcile Every Balance Sheet Account

Not all balance sheet accounts reconcile the same way. A bank account reconciles to the bank statement. A prepayment account reconciles to an amortization schedule. An intercompany account reconciles to the counterparty's books. Here is a account-type breakdown.

Cash & Bank Accounts

• Obtain the bank statement as of month-end
• Reconcile GL balance to bank balance
• Identify outstanding cheques, outstanding deposits, timing differences
• Confirm all reconciling items clear within 3-5 business days of month-end
• Sign off on the reconciliation with preparer and reviewer initials

Accounts Receivable

• Run an aged AR report as of month-end
• Compare total AR to GL balance
• Review 90+ day aged items and assess collectability
• Calculate and post allowance for doubtful accounts if needed
• Document any write-offs or disputed invoices

Prepaid Assets

• Run your prepayment amortization schedule
• Compare schedule total to GL prepaid asset account
• Verify that all new prepayments entered this month are on the schedule
• Verify that all amortization posted this month is in the GL
• Review any adjustments (refunds, terminations) for supporting documentation
• Verify that no prepayments have reached zero balance and should be closed out

Accrued Liabilities

• List all accrued items: payroll, bonuses, commissions, utilities, accrued vacation, etc.
• For each accrual, verify that it was estimated correctly (compare to supporting data)
• Verify that prior month accruals were reversed or updated
• Check that accruals were reversed when actual invoices/payments posted
• Identify any accruals that should have reversed but did not (see Mistake #1 above)

Intercompany Balances

• If you have multiple entities, run an intercompany reconciliation report
• Compare your "due to/from subsidiary X" balance to their "due from/to you" balance
• They should be equal and opposite (mirror images)
• If there is a variance, investigate timing differences, unrecorded transactions, or errors
• Document any items that have been outstanding >90 days — may require approval to settle or write off

Fixed Assets & Depreciation

• Review the fixed asset register for additions and disposals in the period
• Verify GL matches the register
• Calculate depreciation for the month and verify it was posted
• Review asset retirements and confirm gains/losses were recognized