Reconciliation standard
What should happen when your books and your supporting documents disagree?
When the books and a supporting document disagree, neither source should quietly win. A bank line that says one amount and an invoice that says another, or a supplier statement that contradicts the ledger, is carrying information — usually about money someone still owes, a cost nobody recorded, or a decision nobody was told about.
The work is to name the difference, establish which source is reliable for which fact, resolve it deliberately on evidence, and leave the correction visible as a correction. The failure mode is silent: adjusting one side until it agrees with the other, which removes the only signal that anything was wrong.
Two sources, both real. Which is authoritative for what?
A disagreement is usually treated as a contest between documents, which is the wrong frame. Each source is reliable for a narrow set of facts and unreliable for everything else. Settle that once and most conflicts resolve without a judgement call.
| Source | Reliable for | Not reliable for |
|---|---|---|
| Bank statement | That money moved, on what date, in what amount, between which accounts | What the payment was for, which invoices it covers, whether the amount was correct |
| Your issued invoice | What you billed, to whom, on what terms, against what work | Whether the customer accepted it, or intends to pay it in full |
| A supplier bill | What the supplier claims is owed, and on what basis | Whether the goods or services were received, or the price was the one agreed |
| A supplier or customer statement | What the other side believes the position to be | Anything about your own records — it is a claim, not a source |
| Contract, order or engagement letter | What was agreed: price, scope, terms, permitted deductions | What was actually delivered, or actually paid |
| Delivery notes, timesheets, approvals | That the work or the goods happened | What that is worth in money |
| The ledger | What has been recorded, and when | Whether the record was right |
The disagreements that actually turn up.
Four patterns account for most of them. Each has a limited set of explanations, which is what makes them tractable — the work is elimination, not investigation without end.
- The bank received less than the invoice. The candidates are finite: a bank or intermediary charge, a currency conversion, tax withheld at source, a platform or processor fee, a credit note the customer applied, or a short payment made deliberately because something is contested. Each produces a different entry, and only the last means you are still owed the money.
- A supplier statement does not agree with the ledger. Usually timing across a cut-off, bills that never reached you, credits the supplier has not applied, or charges raised against the wrong entity in a group. Statements are the most common route to double payment, because paying from a statement rather than from bills is how one invoice gets settled twice.
- One payment covers several invoices, with no allocation. The amount is real and its meaning is not. Splitting it evenly, or applying it oldest-first by default, produces a ledger that looks allocated and is wrong — and the error emerges months later when the customer queries a balance you have already reduced.
- Two records exist for one event. A proforma and a final invoice, a bill entered from a PDF and again from a feed, a receipt and the card charge behind it. The dispute is not about amount but about existence, and resolving it means deciding which record is the entry and which is evidence supporting it.
A disagreement that recurs every month is not a disagreement. It is an unrecorded arrangement — a standing deduction, an agreed discount, a fee schedule — and it belongs in how the account is billed and recorded, not in a monthly investigation.
One difference of 350, handled properly.
The invoice was raised for 10,000. The bank received 9,650. The difference is 350, and the temptation is to write it off and move on. Handled as a finding, the same difference goes like this.
- Name it before explaining it. The invoice is not settled. A receipt of 9,650 is recorded against it and 350 remains open with a stated reason: short payment, cause not yet established.
- List the candidates, not a conclusion. An intermediary bank charge, a tax withheld, a fee netted by a payment processor, a credit note the customer applied, or a deliberate short payment. Five possibilities, each checkable against a different source.
- Ask the source that can answer. The bank narrative or advice will show a charge. A remittance will show a deduction and usually name it. Only the customer can confirm a deliberate short payment — and that question goes to them in your name, with your agreement.
- Post what the evidence supports. A bank charge is a cost of yours and belongs in the accounts as one. Tax withheld at source is not lost money — depending on the jurisdiction it may be creditable or recoverable, and it needs a certificate and a record rather than a write-off. A processor fee is a cost. And if the customer has simply decided to pay less, nothing has been settled: 350 is still owed, and the reason it is being withheld has just become a known dispute.
- Leave what is genuinely open, open. If nothing checks out, the 350 stays visible with its history instead of being absorbed. A recurring unexplained 350 across many invoices is a pattern worth finding, and writing each one off individually is exactly how it never is.
Why “make it agree” costs more than it saves.
Plugging a difference is not a small sin of tidiness. It is the deletion of a finding, and the losses compound in five directions at once.
- It writes off money you may still be owed. A short payment absorbed into a reconciliation is a receivable that stops being chased because it stopped being visible.
- It hides a cost you are genuinely incurring. A charge buried inside a receivable never appears as a cost, so nobody can see what a payment route, a processor or a currency corridor is costing over a year.
- It moves the problem into a period where it is harder to fix. A difference resolved this week costs a message. The same difference discovered after the period has been reported on changes a number somebody has already used.
- It destroys the pattern. One plugged difference is noise. Forty of them are a supplier billing incorrectly, a customer applying an unagreed deduction, or a fee structure nobody has read since it changed.
- It disarms you for next time. Once your own records have been adjusted to agree with the other side, there is no position left to state when the same thing happens again.
There is a genuine counter-argument and it deserves a straight answer: some differences are too small to justify the work. True — and the right response is a deliberate threshold below which a difference is written off to a specific code, so the annual total is still visible and can be looked at once a year. A threshold is a policy. Doing it item by item because it is quicker is not.
Correct it. Do not overwrite it.
When the answer finally arrives, how the record is changed matters as much as the change itself. A figure that alters with no trace cannot be explained afterwards, and an honest correction becomes indistinguishable from something else.
The plain rule: a correction should be reversed and replaced, not quietly edited. The original entry stays where it is, a reversing entry cancels it with a reason, and the corrected entry takes its place. Anyone looking later sees three facts — what was recorded, that it was wrong, and what is right — rather than one figure that has always claimed to be right.
- What the original entry said.
- What it now says.
- Why, in one sentence a non-accountant can read.
- The evidence that settled it, attached rather than referenced.
- The date, and whose answer the correction rests on.
This matters most across a period boundary. Correcting an open month is routine housekeeping. Correcting a month that has been reported on, used for a filing, or shown to a lender is a different act — it changes a number somebody has relied on, and the material ones should be told rather than discovered. Burying the adjustment in the current month is the worst of the options: it quietly distorts two periods instead of correcting one.
A test worth running on your own books: pick a figure in last quarter’s accounts and ask what it was built from. If answering requires somebody’s memory, the trail is not there.
When the disagreement is not yours to settle alone.
A large share of these end outside the business. A supplier has billed the wrong entity, a customer has applied a deduction nobody agreed, a processor has changed a fee schedule. The evidence is assembled internally; the resolution is a conversation with the other side.
- Assemble before contacting. The agreement, the invoice, the delivery evidence and the bank line, in one place. A query sent without them invites an answer you cannot check.
- Separate the factual question from the commercial one. “Which invoices does this payment cover?” is factual and can be asked as routine. “Will you accept 9,650 in full settlement?” is commercial and belongs to whoever owns the relationship.
- The message goes out in your name. It can be prepared, evidenced and ready to send — and it should still be sent with your authorisation, because it commits you to a position.
- Record the answer against the record, not in an inbox. An explanation that lives in an email thread will be re-investigated in four months by somebody who never saw it.
- Decide once. If the customer’s deduction turns out to be contractual, it belongs in how you invoice that customer, not in a recurring reconciliation query.
Where At Par fits — and the limits.
At Par treats a conflict between two records as the work rather than an obstacle to finishing it. Differences are named with their candidate explanations, chased against the source that can answer, resolved on evidence that stays attached to the entry, and corrected by reversal and replacement so the change is legible afterwards. What cannot be established stays visible with its history instead of being absorbed to make a reconciliation balance.
That is part of bookkeeping and month-end close. Where a long-running set of unresolved differences has built up, untangling it is catch-up work before it is routine work. Unallocated customer payments and contested balances also sit inside receivables operations, and the wider standard is in what an outsourced accounting provider should own. How records and evidence are held is set out separately.
Asked by owners with a difference nobody can close.
The bank shows a different amount from the invoice — which one is right? +
Both, usually. The bank is reliable for what moved and when; the invoice is reliable for what was billed and on what terms. Neither is reliable for the reason they differ. The candidates are limited — a bank or intermediary charge, a currency conversion, tax withheld at source, a processor fee, a credit note the customer applied, or a deliberate short payment — and each produces a different entry. Only the last one means the balance is still owed.
What should I do when a supplier statement does not match my ledger? +
Reconcile it rather than pay from it. Differences are normally timing across a cut-off, bills that never arrived, credits the supplier has not applied, or charges raised against the wrong entity. Work item by item to a list of specific differences, then request the missing documents. Paying from a statement is the most common way one invoice gets paid twice, because a statement is the other side’s claim about the position rather than a record of your own.
Which record is the source of truth when the accounts do not agree? +
No single record is. Authority runs fact by fact: the bank establishes that money moved and when, an issued invoice establishes what was billed and on what terms, a contract establishes what was agreed, delivery evidence establishes that the work happened, and a counterparty statement establishes only what the other side believes. The ledger is never a source — it is a summary of sources, which is why the books cannot settle an argument about themselves and why adjusting them to agree resolves nothing.
Should a bookkeeper adjust the ledger to match the bank? +
Only once the reason for the difference is known. The bank is authoritative for the fact that money moved, so the cash position follows it. What the movement meant is a separate question, and adjusting the ledger to agree without answering it removes the only sign that something needs attention. Where the reason cannot be established, the difference should stay visible with a stated reason rather than be absorbed into whichever account makes the reconciliation balance.
How should an accounting error be corrected? +
By reversal and replacement rather than editing. The original entry stays, a reversing entry cancels it with a stated reason, and the corrected entry takes its place — so the record shows what was booked, that it was wrong, and what is right. A figure that changes silently cannot be explained afterwards and cannot be told apart from something deliberate. It matters most in a period already reported on, where the change affects a number somebody has relied on.
Is it acceptable to write off small differences to make an account balance? +
As a deliberate policy with a threshold, yes. As a habit, no. A business can decide that differences below a set amount go to a specific code, so the annual total stays visible and reviewable. Doing it case by case because it is faster removes exactly the information that would reveal a pattern — a supplier billing incorrectly, an unagreed customer deduction, or a fee structure that changed without anyone reading the notice.
Who decides whether our records or the supplier’s are correct? +
The evidence does, and it usually exists. A contested supplier balance is settled by the underlying documents: the order or agreement for what was agreed, the delivery or completion evidence for what happened, the invoice for what was billed, and the bank for what was paid. Where the documents genuinely conflict, the remaining question is commercial rather than technical and belongs to the business. A provider can assemble the position and prepare the response, but should not concede a balance on an owner’s behalf.
What if the difference sits in a period that has already been closed? +
It should still be corrected, and the correction should be visible as one. A closed period may already have been reported on, used to prepare a filing, or shown to a bank, so the change is not merely a bookkeeping entry — it alters a figure somebody relied on. Material ones need to be told, not discovered. The wrong response is to bury the adjustment in the current month, which quietly distorts two periods instead of correcting one.
What is the difference between an unmatched transaction and a disagreement between records? +
An unmatched transaction has nothing to pair with: money moved and no document explains it. A disagreement has two records that both exist and contradict each other, which is a different problem carrying more information. The first is answered by finding the missing evidence. The second is answered by establishing which source is reliable for which fact, then correcting whichever record is wrong in a way that leaves a trace.
Send us the one you keep rolling forward.
A supplier balance that will not agree, a customer payment nobody can allocate, a bank difference somebody plugged last quarter. We will tell you what it most likely is, what evidence would settle it, and whether it is money you are still owed.
Prefer to reach us directly? Tell us a little and we'll come back with a time.
Send a differenceWe use your details only to prepare for and hold this call. No spam, ever.
Reviewed by an ACCA on the At Par team · Last updated 29 July 2026 · This page describes how conflicting records should be resolved and recorded; the commercial decision in any dispute stays with the business. See what we actually do.