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With many bank accounts, reconciliation fails on account mapping, missing or overlapping statements, inconsistent cut-offs and own-account transfers rather than on matching itself.
Test four risks with real files before comparing anything else: account master control, missing-file and period alerts, a single cut-off basis, and pairing of own-account transfer legs.
Account master with bank, branch, account type, ledger mapping, statement source and owner; alerts for missing statements and overlapping periods; value-date cut-off; same-day pairing of own-account transfers with an in-transit view.
A pre-matching alert list per close, an account-level status view and an in-transit report for own-account transfers.
With many bank accounts, the hard part is not matching. It is making sure every account is mapped correctly, every statement is loaded once for the right period, one cut-off is applied, and transfers between your own accounts pair up. Test those four risks with real files before you look at anything else.
How to run multi-bank reconciliation is covered in the multi-bank reconciliation guide, and the treasury view in multi-bank cash position.
How should accounts be set up?
Ask the vendor to show the account master. Each account should carry:
- bank and branch;
- account type: current, cash credit, overdraft, escrow or collection;
- the ledger it maps to in your ERP;
- how statements arrive: download, email, SFTP or MT940;
- an owner responsible for the close.
Ask how a new account is added and who approves it. Ask what happens to a closed account: its history must remain for audit, and Section 128(5) of the Companies Act, 2013 requires books and vouchers to be kept for eight financial years.
Cash credit and overdraft accounts usually carry a debit balance. Check that the tool shows the sign correctly and does not treat a debit balance as an error. A cash credit account drawn ₹1,85,40,000 against a sanctioned limit of ₹2,50,00,000 has headroom of ₹64,60,000; the tool should show the drawn balance as a liability, not as a negative bank balance to be matched away. Ask also whether account master changes are logged with user and date, in the spirit of the audit trail proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, in force from 1 April 2023.
How are cut-offs and own-account transfers handled?
Use one cut-off basis, usually value date, for every account. Then test transfers between your own accounts. A sweep of ₹25,00,000 from a collection account to the main current account is one debit and one credit. The tool should pair both legs on the same value date. If the credit lands the next day, the pair should show as in transit, not as two unexplained items. At year-end this matters most: a sweep debited on 31 March and credited on 1 April must appear as ₹25,00,000 in transit in the 31 March reconciliation of both accounts.
Keep this test to accounts within one legal entity. Transfers between group companies are intercompany reconciliation and need their own evaluation.
What should you test with real files?
| Criterion | What to test with real files | Pass condition |
|---|---|---|
| Account mapping | Load a statement for an account not in the master | Blocked or flagged, not loaded to a default ledger |
| Missing statement | Leave one account’s file out | Alert before matching starts |
| Overlapping period | Load 1 to 20 and 15 to 31 for one account | Overlap flagged, duplicates not double-counted |
| Period gap | Load 1 to 14 and 16 to 31 | Gap of one day flagged |
| Opening balance carry-forward | Compare the opening balance to last month’s closing | Difference flagged by account |
| Own-account transfer | One sweep with both legs | Legs paired, no exceptions |
| Transfer in transit | Credit lands next day | Shown as in transit until cleared |
| Status view | All accounts at month-end | One screen shows loaded, tied out, reconciled, signed off |
The opening balance guide explains what to do when the carry-forward check fails.
What alerts should a worked close raise?
In an illustrative close, a company holds 24 accounts across 6 banks. At day 2 of the close, before matching starts, the tool should raise:
- 1 missing file: one of the 24 accounts has no statement for the month.
- 2 overlapping periods: two accounts were loaded twice with overlapping date ranges, once from a download and once from an emailed statement.
- The opening balance check: each of the 21 complete files ties to last month’s closing balance, or the difference is shown.
Only then should matching begin. A tool that starts matching on 23 accounts and reports a lower match rate, with no alert about the missing one, will let a gap pass into the signed reconciliation.
What should you ask about volume?
Ask how long a full close takes for all accounts, whether statements can be loaded in one batch, and whether each account owner sees only their accounts. Use the same test pack for every vendor.
How Terra Insight fits
TransactIG delivers bank-to-books reconciliation across your accounts, with an exception queue and audit-ready exports. Bring a month of statements for all your accounts to a representative-sample fit benchmark. See the bank reconciliation software page.