When bank reconciliation does not match, teams tend to do one of two bad things:
- ignore the mismatch (“we’ll fix it later”)
- force the match with an undocumented adjustment (“just make it balance”)
Both create future risk.
If you want the product overview first:
When an adjustment is appropriate (practical categories)
This is not an accounting standard. It’s a workflow guide.
Adjustments are typically appropriate when:
- bank fees are present but not recorded elsewhere
- FX differences exist due to timing/rates
- timing differences exist and you need an explicit placeholder entry
- corrections are required (misposted amounts)
What matters is the workflow:
- classify the exception
- record the adjustment explicitly
- keep the counter-account choice reviewable
The rule: never hide the counter-account
The counter-account is the “why” of the adjustment.
If you do not store it explicitly, you will not be able to explain the reconciliation later.
At minimum, an adjustment must have:
- adjustment amount
- counter-account
- memo/notes (what happened)
- ownership (who created it)
A simple decision tree for counter-accounts
Use this as an operational baseline:
- Bank fee?
- counter-account is typically a bank charges/fees expense account
- FX difference?
- counter-account is typically an FX gain/loss account (per your policy)
- Timing difference?
- counter-account is typically a clearing/suspense account (with follow-up)
- Correction of posting?
- fix the underlying posting if possible, then reconcile cleanly
Do not treat a suspense account as a permanent solution. It’s a controlled exception queue.
Why audit logs matter here
Adjustments are exactly the kind of workflow that needs traceability:
- what was adjusted
- who approved it (if required)
- what changed after the close
If you want governance that scales, pair reconciliation with:
What to do next
If reconciliation exceptions are slowing down your close, implement:
- a consistent import workflow
- a controlled match + adjustment workflow
- explicit counter-account selection and memo notes
Start here: