Review manual bank adjustments before they become permanent differences

A manual adjustment to a bank ledger needs a supported reason. It may record an omitted bank charge, correct an account mapping or resolve another identified error. A description saying reconciliation adjustment does not explain the event. Request the statement line, original entry or other evidence that establishes what changed and why.

Intuit's reconciliation guidance warns that adjustments used to force agreement do not fix underlying errors and can create later problems when those errors are corrected. Apply that caution to the review process: the journal should follow the diagnosis. A small amount can still reflect a recurring process failure or an offsetting pair of larger errors.

Extract journals and other manual postings to each bank account for the period. Record entry date, posting date, amount, offsetting account, preparer, approver and explanation. Separate normal documented entries from exceptions. Include reversals so the reviewer can see whether an amount was removed and later reintroduced.

Check whether the same bank movement already appears through a bill payment, customer receipt or imported transaction. A manual journal can make the bank account look correct while duplicating the expense or leaving a payable open. Trace the full accounting effect, including subsidiary records and clearing accounts.

For a hypothetical $85 debit, the evidence might show a bank fee omitted from the feed. That supports a specific fee entry under the accounting policy. An unexplained $85 difference without a statement line needs further research; the identical amount does not make the two situations equivalent.

Determine whether the adjustment belongs to the current period or corrects an earlier one. Involve the accountant when closed periods, issued financial statements or tax records could be affected. Record the decision instead of changing dates until the difference falls into an open month.

Inspect the account receiving the other side of the journal. Reconciliation differences, suspense and miscellaneous expense accounts can accumulate unresolved amounts. Review their gross activity and aging, including credits that offset debits. A zero net balance does not prove every underlying item was understood. Trace each material credit to its intended offset.

If a temporary entry is justified, document the specific reason, expected resolution and owner. Set a review date and define the evidence required for reversal or replacement. A blanket instruction to reverse everything next month can recreate the same unexplained difference without resolving its cause.

After posting the supported entry, rerun the reconciliation and inspect related customer, supplier or clearing balances. Attach the final report and the approved explanation. Where an earlier unsupported adjustment is removed, preserve its history and link the correcting entry so the reviewer can see the complete sequence.

Identify why the normal process missed the transaction. A missing bank-fee import needs a different fix from an incorrect transfer rule or an unauthorized edit. Assign the relevant change to the person who owns the source process, and check that it works during the next close.

Give the finance lead a short unresolved-adjustment list with amounts and next actions. The useful measure is how many entries still lack an established explanation, together with their potential reporting effect. Counting completed reconciliations alone can hide a ledger that balances through repeated unsupported journals.