The short answer
A three-way reconciliation proves three relationships for the same cutoff: the adjusted bank balance agrees with the accounting control balance, the control balance agrees with the sum of property or liability subledgers, and every reconciling item has evidence, an owner, and a resolution date. Matching only two totals is not a three-way reconciliation.
Key takeaways
Define the three balances before comparing them
Record the bank account and statement cutoff, the exact general-ledger control account and period, and the subledger population included in that control. Save the reports used. A live dashboard viewed later is not the same evidence as the cutoff package.
Use an adjusted bank balance only when each outstanding deposit, payment, fee, or correction is listed. The subledger total should be reproducible from the included property, owner, tenant, or liability balances—not typed as a plug.
Build two proofs and one exception register
Run the bank-to-control proof first, then the control-to-subledger proof. A difference in the second proof cannot be explained by a bank timing item. Keep each item on the side where it originates.
| Proof | Starting evidence | Reconciling items | Acceptance test |
|---|---|---|---|
| Bank to control | Statement ending balance and ledger control balance | Outstanding entries, bank-only activity, posting cutoff | Adjusted bank equals control |
| Control to subledger | Control balance and reproducible subledger total | Mapping errors, unposted items, cross-property entries | Control equals subledger sum |
| Exception register | Every unresolved difference from either proof | Amount, evidence, owner, next action, due date | No hidden or netted exception |
Reject a false zero
A $300 shortage for Property A and a $300 excess for Property B produce a portfolio difference of zero but do not reconcile either property. Test at the level where accountability matters, then roll up. Likewise, a stale outstanding item does not become valid because it appears every month.
If an item is corrected after the cutoff, preserve the original difference and link the later correction. Do not rewrite the workpaper as if the cutoff had been clean.
Operational checklist
Mark your progress, then save a working copy. Selections reset when you leave this page. A checked box is not an approval or evidence of completion.
0 of 7 marked
Edge cases
Sources and references
Follow each source to check the underlying claim. Access checks and professional review are different steps.