Account reconciliation doesn't have to take weeks

Account reconciliation means confirming that the balance in your records matches the balance in the other party's records. It sounds simple, but in practice it is one of the tasks accounting teams spend the most time on: letters are prepared, sent and chased, and differences are investigated one by one. For companies subject to independent audit, the auditor's balance confirmation requests add to the load. In this post we explain why reconciliation drags on, where differences most often come from and how you can speed the process up.

Reconciliation, confirmation and Ba-Bs: a quick distinction

These three terms are often confused:

• Account reconciliation: mutual confirmation of the balance with a customer or supplier as of a given date. Usually done at period end.
• Balance confirmation: written confirmation of balances from accounts selected by the auditor, mostly as part of an independent audit.
• Ba-Bs forms: under the Turkish Tax Procedure Law, a monthly report to the Turkish Revenue Administration (GİB) of purchases and sales of goods and services above a certain amount. For the threshold and details, check the current regulations and your accountant.

A mismatch with the other party in Ba-Bs is an early sign of a difference in the records. That is why regular reconciliation also makes Ba-Bs compliance easier.

Where do differences come from?

Most differences found during reconciliation come down to a few typical causes:

This table turns investigating differences from a random search into a systematic check. In practice, a large share of differences are items like timing and payments in transit that close on their own; once those are filtered out, only a few items truly need investigating. Focusing the team's energy on those remaining items noticeably shortens the whole process.

Five steps to speed up the process

1. Don't wait for period end. Running interim reconciliations quarterly or monthly with accounts that have large balances and heavy activity greatly reduces the year-end load. Differences get resolved while they are small and still remembered.
2. Keep contact details current. A common reason reconciliation letters go unanswered is that they reach the wrong person or an address nobody uses anymore. Record an accounting contact for every account.
3. Attach the statement to the letter. Instead of sending only the balance, adding the transaction list for the period helps the other party find the difference on their side faster.
4. Track everything in one list. When each account was contacted, whether a reply came back and whether there is a difference should all be tracked in a single list, not in scattered emails.
5. Classify the differences. Assign each difference to one of the causes above. Seeing which cause keeps recurring lets you fix the root cause (for example the returns process).

Prioritization: who to reconcile with first?

Rather than sending reconciliation letters to hundreds of accounts at once, prioritizing lightens the work:

• The top percentile of accounts by balance
• Accounts with many transactions in the recent period
• Accounts whose balance hasn't changed for a long time and sits in older aging buckets
• Accounts with a Ba-Bs mismatch
• Group companies and related parties

A receivables aging report is a good starting point for spotting balances stuck in older buckets.

Reconciliation checklist

• A reconciliation calendar (monthly/quarterly/yearly) is set by account group
• Every account has a current accounting contact
• The transaction list is sent along with the letter
• Sending, replies and differences are tracked in a single list
• Differences are classified by type of cause
• Open differences have an owner and a due date
• Balances between group companies are matched separately

How we do it at Globya

The time-consuming part of reconciliation is gathering balances and transactions correctly and prioritizing them. READERP connects read-only to the common ERP and finance platforms on the market, led by Netsis and Logo, the ERP systems widely used in Türkiye; it never writes a single line to the ERP and is set up the same day, with a ready-made Confirmation view. You can ask questions like "Which accounts' balances haven't changed for more than 90 days?" in plain Turkish. If you need reports specific to your company's reconciliation flow, we build custom financial reports as part of our ERP and reporting service. We look separately at the burden of tracking lists kept by hand in Excel in our post on the hidden cost of Excel reporting.

Frequently asked questions