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Glossary

Reconciliation

Confirming that a figure computed one way equals the same figure computed another way, most often that a sales roll-up equals the number finance reports for the same period and definition.

DefinitionConfirming that a figure computed one way equals the same figure computed another way, most often that a sales roll-up equals the number finance reports for the same period and definition.

The standard

Zero variance, for the same period and the same definition. Where definitions differ, for example gross bookings against net revenue, the difference is a named adjustment line, not an unexplained gap.

The five checks

Values are numeric. Every level is filled. The hierarchy is a tree. No duplicate rows. Level totals agree with the grand total. Run in that order, each failure leaves a fingerprint at a specific level.

Reconciled does not mean clean

It means every exception is visible: "3 rows with no region, £4,300, listed below". The number is trusted because the exceptions are named, not because there were none.

How it is computed

The same figure is computed two ways, most often a sales report total and the finance ledger for the same period, and every difference is listed as a named reconciling item.

Example

Sales report $4.20 million, ledger $4.23 million. Difference $0.03 million: intercompany sales of $0.05 million excluded from the report, less $0.02 million of credits dated after the export.

Where it goes wrong

Differences explained as timing, with no list. The gap grows each month until nobody trusts either number.