How often should accounts receivable be reconciled?

Monthly at minimum, aligned to your close. Teams with high transaction volume or many part payments usually apply cash daily or weekly and reserve the full sub-ledger-to-control comparison for the month end.

What is the difference between AR reconciliation and bank reconciliation?

AR reconciliation compares the open-invoice sub-ledger to the AR control account in the general ledger. Bank reconciliation compares your cash ledger to the bank statement. Cash application connects them by tying each deposit to the invoices it settles.

What causes most AR reconciliation differences?

Timing around the cut-off, unapplied cash, credit notes and write-offs recorded in one place only, and manual journals posted directly to the control account.

Receivables close

How to reconcile accounts receivable, step by step

SettlePair Editorial · Published August 29, 2026 · 4 min read

Accounts receivable reconciliation proves that the detail behind your customer balances agrees with the general ledger, and that the cash you banked is applied to the right invoices. This walkthrough sets out the order of work, the checks that catch most differences, and how to close a period with the exceptions named rather than hidden.

Key takeaways

Reconcile in a fixed order: freeze the period, agree the sub-ledger to the control account, apply cash, then explain the residual difference.
Most AR differences come from timing, unapplied cash, credit notes and manual journals posted directly to the control account.
Every unexplained difference should end the period with an owner and a next action, not a rounding note.
Match evidence — invoice number, amount, payer name, date — should be recorded alongside the decision so the work can be reviewed later.

What accounts receivable reconciliation actually proves

AR reconciliation is the check that two independent records agree: the receivables sub-ledger, which holds one line per open invoice, and the accounts receivable control account in the general ledger. If the two agree, the balance you report as owed by customers is supported by named invoices.

It is separate from bank reconciliation, which compares your cash ledger to the bank statement. The two meet at cash application: a deposit on the statement has to be matched to the invoice or invoices it settles before either reconciliation can be finished.

1. Freeze the period and gather the records

Use the same cut-off date for every report. A large share of unexplained differences turns out to be one report run a day later than another.

Before you start, pull:

The AR ageing or open-invoice report as at the period end date.
The general ledger balance for the AR control account at the same date.
Bank statements or a bank CSV covering the period, including the last few days that may carry timing differences.
Credit notes, write-offs and manual journals posted in the period.
The prior period's reconciliation, including its open items.

2. Agree the sub-ledger total to the control account

Compare the ageing total to the control account balance. A difference here means something was posted to the control account without a corresponding invoice-level entry — commonly a manual journal, a mis-posted receipt, or a credit note applied at the header level only.

Investigate this before touching individual invoices. Cash application cannot fix a ledger-level posting error, and applying receipts on top of an unreconciled control account makes the difference harder to trace.

Worked example

AR ageing total          182,430.55
GL control account       183,180.55
Difference                  750.00  <- investigate first
Cause: credit note CN-118 journalled to the control account only

3. Apply the cash

Work through the deposits on the statement and decide which invoice each one settles. Clean cases carry the invoice number in the payment reference. The work is in the rest: batched deposits covering several invoices, part payments, short payments where a deduction has been taken, and payer names that do not resemble the customer name in your ledger.

Match on evidence rather than on the amount alone. An amount that appears twice in the ageing is not enough to identify an invoice — the reference, the payer and the timing all need to agree before the allocation is safe to post.

4. Work the exceptions

Typical exception categories and their treatment:

Timing — payment banked after the cut-off, or invoice raised after the customer's payment run. Carry forward with a date.
Unapplied cash — money received that cannot yet be tied to an invoice. Keep it visible; do not net it against the ageing.
Short payment — a deduction, discount or dispute. Record the reason so it can be chased or credited.
Duplicate invoice or duplicate receipt — remove at source rather than adjusting the reconciliation.
Bank fees and FX differences — post to the correct account, not against the customer balance.

5. Document and close

A finished reconciliation states the closing balance, the items that support it, and each open difference with an amount, an explanation and an owner. Keep the evidence for each allocation with the entry — the reference matched, the amount applied, and who approved it.

Anything that survives two periods without movement is not a reconciling item, it is a decision that has not been made: write it off, credit it, or escalate it.

Where SettlePair fits

SettlePair covers the cash application step. You export open invoices and bank transactions as CSV, and it proposes the likely payment for each invoice with the evidence behind each score visible: invoice number found in the description, amount agreement, name overlap, plausible date. You approve or reject each suggestion, allocate part and grouped payments in integer cents, and export the reviewed result as CSV to post in your accounting system.

Parsing and matching run in your browser tab, so no customer data leaves your machine. SettlePair is a review aid, not an accounting system: it does not post entries and does not replace the control account agreement described above.

Common questions

How often should accounts receivable be reconciled?: Monthly at minimum, aligned to your close. Teams with high transaction volume or many part payments usually apply cash daily or weekly and reserve the full sub-ledger-to-control comparison for the month end.
What is the difference between AR reconciliation and bank reconciliation?: AR reconciliation compares the open-invoice sub-ledger to the AR control account in the general ledger. Bank reconciliation compares your cash ledger to the bank statement. Cash application connects them by tying each deposit to the invoices it settles.
What causes most AR reconciliation differences?: Timing around the cut-off, unapplied cash, credit notes and write-offs recorded in one place only, and manual journals posted directly to the control account.

Sources

General guidance only, not accounting, tax or legal advice. Confirm treatment with your accountant and your own policies.