Balance sheet reconciliation: fixing the broken link between finance and reality

Finance and Accounting exist to establish truth. If the numbers aren’t right, the business isn’t either. And yet, when it comes to balance sheet reconciliation, many high-transaction companies are operating in the dark.

At its core, reconciliation should be straightforward: every asset, liability, and equity account should accurately reflect reality. But for businesses dealing with millions of transactions across multiple order systems, payment providers, and ERP solutions, ensuring accuracy is anything but simple. The complexity of modern financial ecosystems often leads to unexplained gaps between recorded revenue and actual cash, suspense accounts overflowing with unresolved mismatches, and finance teams spending more time untangling historical data than driving the business forward.

Take the words of Jens Baarveld, CFO of MultiTankcard:

“We needed a way to match millions of transactions across fuel, EV charging, and public transport—without the constant risk of double invoicing or financial uncertainty.”

This isn’t just a minor inconvenience. It’s a fundamental issue that impacts decision-making, investor confidence, and even regulatory compliance. A recent case highlights this risk: Direct Line, a major motor insurer, disclosed an accounting mistake that led to an overstatement of its financial strength. An internal review found that its solvency capital ratio had been reported at 197%, when in reality, it was only 188%. This discrepancy exposed weaknesses in their financial controls and underscored the critical need for rigorous reconciliation processes. (source)

A growing problem that won’t fix itself

Reconciliation inefficiencies stem from a few fundamental issues:

• Disjointed data flows: Transactions pass through multiple systems—each with its own format and timing—leading to inevitable discrepancies.
• Timing mismatches: Payments may be recorded in one place but not yet settled in another, creating temporary but confusing imbalances.
• Suspense accounts that act as black holes: Instead of providing clarity, they become dumping grounds for unresolved mismatches that linger for months.
• Regulatory and audit risks: Without a clear, real-time view of the balance sheet, compliance becomes reactive rather than proactive.

Macy’s recently uncovered $151 million in erroneous bookkeeping entries that had been accumulating since late 2021. Despite this substantial misstatement, the company opted not to retract previous financial statements, arguing that the errors did not materially impact key metrics. This case sparked debate among financial professionals about the materiality of such errors and highlighted the necessity of rigorous reconciliation practices. (source)

Without a systematic approach, these problems don’t just persist—they compound over time. The longer mismatches go unresolved, the harder they become to untangle.

The shift: real-time, continuous reconciliation

The old way—painstakingly tracking every balance sheet item at month-end—is unsustainable. High-transaction businesses need a new approach:

1. A single source of truth: Instead of relying on fragmented data sources, reconciliation should integrate order, payment, and accounting data into one cohesive view.
2. Automated suspense account management: Anomalies should be flagged and categorized in real-time, reducing reliance on suspense accounts as a temporary fix.
3. Continuous reconciliation instead of month-end sprints: Instead of scrambling at the close, mismatches should be identified and resolved as they happen.
4. High volume accounting made easy: By booking correct and reliable aggregate entries based on real transactional data, businesses can ensure accuracy and efficiency at scale

 

This shift isn’t theoretical—it’s happening now. Freddy Dijkman, CFO of Recharge.com, highlights the impact:

“Now that Actuals automates reconciliation, our team can focus on resolving issues instead of getting bogged down in the process itself.”

For high-transaction businesses, this is the difference between playing catch-up and having full control.

Trust starts with the balance sheet

A balance sheet riddled with mismatches and unexplained accounts does more than cause internal headaches—it erodes trust. Investors, auditors, and executives rely on financial statements to gauge a company’s health. If finance teams can’t confidently stand behind their numbers, it impacts everything from strategic decision-making to valuations.

At Actuals, we help high-transaction companies regain control. Our real-time reconciliation platform eliminates suspense account chaos, automates matching, and ensures that every recorded number has solid proof behind it. Because when it comes to financial truth, there’s no room for doubt.

Want to see how leading businesses are fixing their balance sheet reconciliation? Let’s talk.

𝐀𝐜𝐭𝐮𝐚𝐥𝐬 – 𝐓𝐫𝐮𝐭𝐡 𝐈𝐧𝐬𝐢𝐝𝐞™