Reconciliations

Q: How do you reconcile petty cash and expense floats?

Petty cash reconciliation compares the fixed float to cash on hand plus vouchers/receipts for amounts spent; the two must equal the imprest amount. Differences indicate missing receipts or errors. On replenishment, expenses are posted and the float restored to its set level, keeping the control tight.

Q: What is the frequency at which key reconciliations should be performed?

High-risk, high-volume accounts (bank, AR, AP, cash clearing) are typically reconciled monthly at minimum, and often more frequently (daily/weekly for bank and cash) to catch issues early. Lower-risk accounts may be quarterly. Frequency is risk-based—more movement and more risk warrant more frequent reconciliation.

Q: How do you reconcile a clearing/suspense account to zero at period-end?

Clearing and suspense accounts should net to zero (or a small explained balance) at close. Analyze open items, match offsetting entries, resolve unmatched ones (post to correct accounts, chase missing documents), and escalate aged residuals. A persistent balance signals unresolved transactions or a process gap to fix.

23 question(s)

How do you reconcile petty cash and expense floats?

Intermediate

Petty cash reconciliation compares the fixed float to cash on hand plus vouchers/receipts for amounts spent; the two must equal the imprest amount. Differences indicate missing receipts or errors. On replenishment, expenses are posted and the float restored to its set level, keeping the control tight.

Imprest float 500. Cash on hand 120 + receipts 375 = 495.
  Shortage 5 to investigate; replenish 380 to restore 500.

Real-world example A petty-cash count comes up $5 short of the float plus receipts, prompting a review before replenishment.

Common follow-ups: What is an imprest system? | What does a shortage indicate?

Cash Application Reconciliations Payment Runs

What is the frequency at which key reconciliations should be performed?

Beginner

High-risk, high-volume accounts (bank, AR, AP, cash clearing) are typically reconciled monthly at minimum, and often more frequently (daily/weekly for bank and cash) to catch issues early. Lower-risk accounts may be quarterly. Frequency is risk-based—more movement and more risk warrant more frequent reconciliation.

Real-world example Bank accounts are reconciled daily, AR/AP monthly at close, and dormant accounts quarterly, matched to their risk.

Common follow-ups: What drives reconciliation frequency? | Why reconcile bank accounts more often?

Cash Application Payment Runs Reconciliations

How do you reconcile a clearing/suspense account to zero at period-end?

Advanced

Clearing and suspense accounts should net to zero (or a small explained balance) at close. Analyze open items, match offsetting entries, resolve unmatched ones (post to correct accounts, chase missing documents), and escalate aged residuals. A persistent balance signals unresolved transactions or a process gap to fix.

Real-world example A month-end review clears the payroll suspense account to zero by matching each pending item to its final posting.

Common follow-ups: Why should clearing accounts net to zero? | What does a residual balance indicate?

Cash Application Purchase Orders & 3-Way Matching Reconciliations