AR Reconciliation Checklist
Reconciling accounts receivable means proving that your AR sub-ledger, your customer accounts and the general ledger control account all tell the same story. This checklist gets you to a clean tie-out.
What this checklist covers
- Agree the AR sub-ledger total to the general ledger control account
- Identify the make-up of any reconciling difference
- Spot misposted journals that bypass the sub-ledger
- Clear unapplied cash and orphaned credits before sign-off
- Document the reconciliation so it can be reviewed
7 min
Before you start
An AR reconciliation only works once the ledger has stopped moving. Apply your cash, post your credits and freeze the period first, then reconcile against a fixed point in time.
- Confirm all receipts for the period are applied and all credit notes are posted.
- Set a single reconciliation date and run every report as at that exact date.
- Have the prior month's signed reconciliation ready so you can compare reconciling items.
- Identify who can post journals directly to the AR control account — those are the usual cause of breaks.
Step 1 — Pull the two balances
- Run the aged trial balance (the AR sub-ledger) as at the reconciliation date and note the total.
- Run the general ledger and note the AR control account balance at the same date.
- Compare the two figures and record the difference, even if it is zero.
Step 2 — Find and explain the difference
- Scan the control account for manual journals posted directly, bypassing the sub-ledger — a very common break.
- Check for receipts banked but not yet applied to an invoice, and for credits raised in the GL but not the sub-ledger.
- Look for timing items: invoices or receipts dated on one side of the cut-off but posted on the other.
- List every reconciling item with a dollar value until the unexplained gap is nil.
Step 3 — Clear and document
- Correct genuine errors at their source rather than posting a balancing plug.
- Reallocate unapplied cash to the correct invoice or customer account.
- Write a short reconciliation note: the two balances, the reconciling items and the resolution.
- Have a second person review and sign the reconciliation for the period.
Keeping reconciliations tidy each month also makes overdue accounts obvious. Once a debt is clearly owed and reconciled, you can request a free debt appraisal rather than letting it sit on the ledger.
Common mistakes
- Posting a plug to force a match. A balancing journal hides the real error and resurfaces next month, usually bigger.
- Reconciling a moving target. If cash is still being applied while you reconcile, the totals will never settle — freeze the period first.
- Treating unapplied cash as income. Money on account is a liability to the customer until it is matched to an invoice.
- No review. A reconciliation nobody else checks is an assertion, not a control.
Key takeaways
- Reconciliation proves the sub-ledger and GL control account agree at a fixed date
- Most breaks come from manual journals posted straight to the control account
- Fix errors at the source rather than posting a balancing plug
- Document and have someone review every monthly reconciliation
Frequently asked questions
What is the AR control account?
It is the single general-ledger account that should always equal the sum of all customer balances in the sub-ledger. Reconciling AR is the act of proving those two figures match and explaining any difference.
Why does my reconciliation break every month by a similar amount?
A recurring break usually points to a systematic cause — a journal template posting to the control account, a rounding rule, or a feed that posts to the GL but not the sub-ledger. Trace one occurrence fully and the pattern usually becomes clear.
How often should I reconcile AR?
At least monthly, as part of close. Many finance teams do a lighter reconciliation weekly so that month-end holds few surprises and breaks are caught while they are small.
Work the checklist, then get paid
Use the free Invoice Generator, then let Merion recover anything that goes unpaid — commission-only.