Auto-reconciliation rules

How auto-reconciliation works

Auto-reconciliation evaluates every open account at period open and automatically marks qualifying accounts as reconciled. The system runs three checks in a fixed priority order. If an account passes any check, it is classified as auto-reconciled and no manual workpaper is required.

Auto-reconciliation is controlled at the format level. Each format can enable or disable each method independently. An account only qualifies for auto-reconciliation if its format has at least one method enabled.

The three methods

Methods are evaluated in the following priority order. Once an account matches a method, the remaining methods are skipped.

1. Zero balance

The account qualifies when its absolute variance is less than the floating-point epsilon of 0.005. In practice this means the GL balance and comparison balance are equal to the cent.

For Balance Comparison formats, the variance is calculated as the GL balance minus the comparison balance. For Variance Analysis formats, it is the current-period balance minus the prior-period balance. Account Analysis formats do not support zero-balance auto-reconciliation because there is no single comparison value.

This is the most common auto-reconciliation method. It typically covers accounts such as dormant clearing accounts, zero-activity cost centres, and intercompany accounts that net to zero.

2. Within tolerance

The account qualifies when the absolute variance is less than or equal to a configurable tolerance amount. The tolerance is set on the format in the account's functional currency.

When an account reports in a currency other than the organisation's functional currency, the system converts the variance to the functional currency using the period-end exchange rate before comparing against the tolerance. This prevents small foreign-currency rounding differences from blocking auto-reconciliation.

Example: a format with a tolerance of $5.00 will auto-reconcile an account whose variance is $3.42 but not one whose variance is $7.10.

3. No activity

The account qualifies when the current-period GL balance and comparison balance are identical to the balances from the most recently completed prior period. This captures accounts where nothing changed: same opening balance, no transactions, same closing balance.

The no-activity check requires at least one completed prior period. If the account has never been reconciled before, this method is skipped.

Execution details

Classification loop

When a period is opened or when auto-reconciliation is triggered manually, the system iterates over every open account in the period. For each account it checks whether the format has auto-reconciliation enabled and, if so, runs the three methods in priority order.

Single batch update

All qualifying accounts are updated in a single database transaction. Each auto-reconciled account receives a status of AUTO_RECONCILED, a timestamp, and a reference to the method that matched. If the batch fails for any reason, no accounts are updated and the error is logged.

Audit logging

Every auto-reconciled account generates an audit log entry that records the method used, the variance at the time of classification, and the tolerance threshold (if applicable). These entries are visible on the account's activity timeline and in the period audit report.

Typical results

In a typical month-end close, 40–60% of accounts qualify for auto-reconciliation. The exact percentage depends on the mix of account types and the tolerance thresholds configured on each format. Organisations with a high proportion of dormant or low-activity accounts often see rates above 60%.

Auto-reconciled accounts remain visible in the worklist with a distinct status badge. Reviewers can inspect the auto-reconciled workpaper and override the status if needed.

Arvexi Cortex–triggered sweeps

Cortex can trigger an auto-reconciliation sweep outside the normal period-open workflow. This happens when Cortex detects that new data has been imported (for example, a late bank statement upload) and re-evaluates previously unreconciled accounts.

Cortex-triggered sweeps follow the same three-method priority and the same batch-update logic. The only difference is the user ID recorded in the audit log: Cortex uses a synthetic userId so its actions are clearly distinguishable from manual or scheduled runs.

Configuration checklist

Open Settings → Reconciliation Formats and select the format you want to configure.
In the Auto-Reconciliation section, enable one or more methods.
If you enable Within Tolerance, set the tolerance amount in your functional currency.
Save the format. The new rules take effect on the next period open or manual sweep.

Frequently asked questions

Can I disable auto-reconciliation for a single account?

Auto-reconciliation is controlled at the format level, not the account level. To exclude a specific account, move it to a profile that references a format with auto-reconciliation disabled.

What happens if I change the tolerance after accounts have been auto-reconciled?

Changes to the tolerance do not retroactively affect previously auto-reconciled accounts. The new tolerance applies only to future periods.

Does auto-reconciliation run on Account Analysis formats?

Only the Within Tolerance and No Activity methods are available for Account Analysis formats. Zero Balance is not applicable because Account Analysis does not produce a single variance value.

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