 It’s important to look ahead when deciding how to attack your balance sheet reconciliation process. Workpapers are an ever-changing beast in growing businesses, so it’s always good to be prepared and think not just for today, but for how things will look tomorrow. Just Because It’s Working Doesn’t Mean It Will Keep WorkingOn the surface, the rec looks fine. The numbers match, there’s something sitting in the support column, and nothing jumps out as wrong, so it’s pretty much all good. The problem revolves around this fact: just because it’s working today doesn’t mean it’ll keep working forever. Accounts change functionality, companies are added, and more work is done at an administrative level to maintain steady business growth. That’s the thing we’re trying to get across when we talk about future-proofing reconciliations. It’s not just about making the current processes faster, it’s about making sure the process holds up when things change…and they will change. When Things Shift, Cracks Start to ShowMaybe you’re reconciling quarterly right now, which is fine while the team’s got capacity. But what happens when the business adds an additional revenue/expense stream and starts asking for monthly reporting? Or when someone goes on leave and their reconciliations have to be handed over mid-month? That’s when things can start to crack. And if the process isn’t simple enough to hand over, or efficient enough to scale up, you’ll end up spending your time just getting things in order instead of actually understanding what’s going on. A Real ExampleIn one of my last jobs as a finance manager, we had a new account set up, it only had one transaction in it, but it was material. And for a couple of months it was still sitting on the balance sheet, when it really should have gone to the P&L a month or so earlier. The business was going through due diligence at the time, and that balance which was still sitting there raised genuine questions, and eventually the deal didn’t go through. I can’t say for sure that was the reason, but I can definitely say that it didn’t help. And it was completely avoidable with a process that had scaled along with our company as we had grown to that point. The Point of ReconciliationsThe whole point of balance sheet reconciliations is to know what’s in there, and to know it properly. Preferably across both the do-er and the reviewer, if applicable. Material balances, immaterial but important variances - the Balance Sheet just loves to hide these types of transactions. Problem accounts tend to just roll on quietly until someone takes a proper look. That’s why frequent reconciliations and understanding at a transactional level matters. It’s not about wasting time on every little account, it’s about making sure you’re not hoarding risk without realising it. If you leave things too long, or are not looking in the right places, the cost of fixing them only grows. So What Does Future-Proofing Actually Mean?To me, it means having a process that you can trust to scale with the business. One that’s efficient, meaning you’re not manually wrangling data for hours. Simple enough that someone else can pick it up without a week of handover. But still structured enough to maintain governance (connecting us back to the “point” of reconciliations). You want to make it faster, yes, but without cutting corners on understanding, governance or control. Tools like RecHound can help with that, but the point to this is more about asking yourself this question: If there was a significant change in your business today, would your current balance sheet reconciliation process hold up? A huge thanks to our friends at RecHound for providing us with this article and sharing their insights. Want to learn more? Don't hesitate to reach out to us or directly to the team at RecHound.
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AuthorClarity Street was conceived from years of engaging with Accounting firms on a daily basis and a constant desire to make Accounting firms & SME’s more efficient and profitable. Archives
January 2026
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