Understanding reconciliation formats

What is a reconciliation format?

A format is the blueprint for how an account is reconciled. It defines the reconciliation method, which sections appear on the workpaper, which attachments and explanations are required, and what compliance questions the preparer must answer before submitting.

Every account profile references exactly one format. When a reconciliation is opened for a period, Arvexi uses the profile's format to generate the workpaper skeleton, set required fields, and determine whether the account qualifies for auto-reconciliation.

Default formats

Arvexi ships with seven default formats that cover the most common reconciliation types. Default formats cannot be deleted but can be cloned and customised.

Bank Reconciliation: BALANCE_COMPARISON. Compares the GL balance to a bank statement balance. The preparer documents reconciling items that explain the difference.
Accounts Payable: BALANCE_COMPARISON. Matches the GL to the AP subledger total. Standard for trade payables and accrued liabilities.
Accounts Receivable: BALANCE_COMPARISON. Matches the GL to the AR subledger total. Supports aging bucket analysis.
Prepaid Expenses: ACCOUNT_ANALYSIS. Builds a rollforward of the account: opening balance, additions, amortisation, adjustments, and closing balance. Each line item references a supporting schedule.
General Reconciliation: BALANCE_COMPARISON. A catch-all for any account that compares a GL balance to an independently sourced balance.
Variance Analysis: Monthly: VARIANCE_ANALYSIS. Compares current-period and prior-period balances. The preparer explains material variances above a configurable threshold.
Variance Analysis: Quarterly: VARIANCE_ANALYSIS. Same method as monthly but compares against the balance from the same quarter in the prior year.

Reconciliation method types

Every format uses one of three reconciliation methods. The method determines the layout of the workpaper and the calculation that produces the final variance.

Balance Comparison

The preparer enters a GL balance and a comparison balance from an independent source (bank statement, subledger, confirmation). The system calculates the difference and displays reconciling items that explain it. The goal is a fully explained variance of zero.

Account Analysis

The workpaper presents a rollforward: opening balance, debits, credits, adjustments, and closing balance. Each movement line is independently documented. This method is standard for balance sheet accounts where no single external source exists for comparison, such as prepaids, fixed assets, accruals, and intercompany balances.

Variance Analysis

The system pulls the current-period balance and a comparison balance from a prior period (prior month, prior quarter, or same period prior year). The preparer explains material variances. This method is typical for income statement accounts and low-risk balance sheet accounts.

Configurable format settings

When creating or editing a format, the following settings control the workpaper's behaviour. All settings are optional and fall back to sensible defaults when left blank.

Section labels

Override the default labels for any section of the workpaper. For example, rename “Comparison Balance” to “Custodian Statement Balance” on a custody reconciliation format. Labels are cosmetic and do not affect calculations.

Required attachments

Specify the minimum number of file attachments a preparer must upload before submitting the reconciliation. Set to zero to make attachments optional. Common use: require at least one bank statement PDF on Bank Reconciliation formats.

Required explanations

When enabled, the preparer must enter an explanation for every reconciling item (Balance Comparison) or every variance above the materiality threshold (Variance Analysis). Prevents submission of workpapers with unexplained differences.

Compliance questions

A list of yes/no or free-text questions appended to the bottom of the workpaper. Typical examples: “Have all items over 60 days been escalated?” or “Is there any litigation exposure related to this account?” Questions are answered during preparation and are visible to reviewers.

Auto-reconciliation rules

Formats can opt in to one or more auto-reconciliation methods: zero balance, within tolerance, or no activity. When enabled, qualifying accounts are reconciled automatically at period open, saving manual effort. See the auto-reconciliation article for method details.

Max age days

The maximum number of days a reconciling item can remain unresolved before it is flagged as aged. Aged items appear in a separate section of the workpaper and are highlighted in the worklist. Set to 0 to disable aging alerts entirely.

Creating a custom format

Navigate to Settings → Reconciliation Formats and select New Format. Choose a reconciliation method, give the format a name and description, and configure the settings above. The format is available immediately and can be assigned to any account profile.

To modify an existing format without affecting accounts already using it, clone the format first. Changes to a format apply to all future reconciliations that reference it; previously submitted workpapers are not affected.

Format assignment

Formats are assigned at the account profile level, not at the individual account level. This means every account sharing a profile uses the same format. To change the format for a single account, move it to a different profile or create a new profile with the desired format.

Was this article helpful?