Reconciling a subledger to the general ledger

Situation

Wholesaler with three entities, one shared finance team of seven people. Every month-end close, the reconciliation of debtors and creditors to the general ledger was run by hand. In practice that took half a day per entity: the recurring differences (timing around the month change, entries in the wrong periods, charges between entities) had to be dug out and explained again and again. The work landed on one desk and its quality depended on that person’s experience.

What was built

• A reconciliation process that places the general ledger balance and the subledger side by side per account, with matching per posting.
• Recognition of the patterns that return every month: intercompany entries that are not mirrored, journal entries with the wrong period, charges without a counter-entry.
• Explanation per difference, with the source line attached, in a form that goes one-to-one into the reconciliation report.
• Exceptions the system does not explain itself go with all context to a controller, not through the standard path.

What it delivered

After handover: the throughput time of the reconciliation dropped from an average of four hours per entity to about one hour, and the manual corrections after the close on these accounts dropped. The gap between the fastest and slowest entity has almost gone. The process is fixed, not sitting in one person’s head.

What was not changed

The general ledger and subledger packages stayed in place. The close planning stayed in place. The reconciliation report looks different, more readable and with the explanation with it, but it is still the same step in the close, only faster and with less back-and-forth.