Bank Reconciliation

The bank and custodian report two things: balances and movements. Balance snapshots record each account’s ledger and available balance as of a time, with the provider’s snapshot ID, and are kept as read-only evidence. Movements arrive as reconciliation items with the provider’s event ID, the account, the amount, the date and a state of Unmatched, Matched or Exception.

The Reconciliation Accountant matches each movement to its instruction. Matching is exact on provider event, amount, date, verified evidence and the instruction’s account lines. A movement with a different amount or date is never forced to match; it becomes an Exception. For each account, the opening balance plus confirmed movements must equal the closing balance.

• Snapshots as evidence. Balances are imported as the provider reports them and are not edited.
• Exact matching only. Movements match instructions on identity, amount and date; anything else is an exception to investigate.
• Roll-forward per account. Opening balance plus movements must equal the closing balance before the day is signed off.

Agree which accounts are reconciled daily and the time of day snapshots are taken. Decide who investigates exceptions and how quickly. Agree how bank fees and interest that have no instruction are handled. Plan the statement and balance feeds from each bank and custodian.

On Thursday the custodian reports a debit of $4,880,000 on the operating account and a matching credit on the custody account. The Reconciliation Accountant matches each movement to the bill purchase instruction on provider event, amount and value date. Opening balances plus these movements equal Thursday’s closing snapshots for both accounts.

The same day the bank reports a $35 debit with no instruction. It stays Unmatched, then becomes an Exception once the accountant confirms it is a wire fee. The accountant raises it with treasury, and a fee instruction is prepared and approved so the item can be matched.

• Reconciliation by State — Movements grouped by Unmatched, Matched and Exception, with account and amount.
• Reconciliation Items Ledger — Every movement with date, amount, account and matched instruction.
• Account Balance Snapshots — Ledger and available balances by account and time.

• Bank statement reconciliation: Import, match and roll forward each account.
• Instruction to settlement: See how confirmed instructions feed the match.

Plan the bank and custodian feeds before the first reconciliation.