Ledger Reconciliation ties your day-to-day records back to the general ledger. It checks that what your subledgers say — the open invoices behind Accounts Receivable, the open bills behind Accounts Payable, and the value of stock on hand — matches the balance of the matching control account in the general ledger.
Where to find it
From the Accounting menu, open Reports and choose Ledger Reconciliation.
Why it matters
When a subledger and the general ledger agree, your books are trustworthy and nothing has slipped through. When they disagree, this report shows you the difference and helps you find the cause — usually a journal entry posted straight to a control account, or a document that wasn’t posted. Reconciling every month is a standard financial control and a common requirement for audits.
What it checks
- Accounts Receivable — open invoices, less payments and credit notes, compared to the AR control account.
- Accounts Payable — open bills, less payments, compared to the AP control account.
- Inventory — the value of stock on hand compared to the inventory account. This one is an estimate — see below.
Reading the result
- Balanced (shown as Tied in the history) — the subledger matches the general ledger. Nothing to do.
- Variance — the two don’t match, by the amount shown. Worth investigating.
- Review — used for Inventory, which is valued at an average cost and can’t tie to the exact penny. Investigate a large or growing difference, but a small one is normal.
Tip: A green Tied result means the subledger and the ledger agree — there is nothing to chase.