One of the most hotly debated topics in accounting is over when you should perform your balance sheet reconciliations: before or after the ledger is closed for the month. While there’s no one-size-fits-all answer, the general consensus is to reconcile after the close. Here’s why.  

Timely Reporting
If you wait to complete and review all your balance sheet reconciliations before closing the ledger, you risk delaying your monthly financial reporting. By closing the ledger first, you ensure that your month-end reports are timely, even if some reconciliations are still in progress. 
For example, if your month-end close deadline is the 5th working day of the month, but reconciliations take until the 7th working day, you’ll miss your reporting deadline. By closing the ledger on the 5th and completing reconciliations afterward, you’ll meet your deadline while still ensuring accuracy. That said, you still need confidence in your numbers before closing the ledger and beginning reporting. This is where materiality and other procedures, such as analytical reviews, come into play. 

Focus on Accuracy
Post-close reconciliations allow you to give each account the attention it deserves. Without the pressure of an impending deadline, you’re more likely to spot and correct errors.  
For instance, if you’re reconciling a complex account like deferred revenue, you’ll have the time to investigate smaller discrepancies, document adjustments properly, or even go back and fix something in the source system. This is especially helpful when the investigation relies on input from another team that may not fully appreciate the inflexibility of month-end timelines. Taking this extra time reduces the risk of errors and ensures your financial reports are accurate.  

Second Ledger Opening
At year-end or half-year, it’s common to have a second ledger opening to post adjustments like deferred tax or corrections identified during reconciliations. This ensures your financial statements are accurate and audit-ready while allowing you to present flash results and begin preparing financial statements.  
For example, if you discover an error in your accrued expenses balance during the reconciliation process, you can first assess materiality and, if necessary, make an adjustment during this second ledger opening. This approach ensures your final financial statements are both accurate and prepared in a timely manner.  

Inbuilt Checks
Your month-end workbooks should include inbuilt checks to ensure accounts are materially correct before closing the ledger for the month. For example, perform analytical review of key accounts to identify any unusual variances—whether month-on-month, against budget, or compared to prior years.  
If you notice a significant change in an account balance, investigate it before closing the ledger. This reduces the likelihood of errors being discovered during the reconciliation process. Additionally, set up your workbooks with a closing balance cell that tells you what the balance in your ledger should be after posting relevant manual journals. This can be quickly checked against the ledger to confirm whether the account balance is what you expected it to be and materially correct.  

Materiality Thresholds
Set materiality thresholds for your reconciliations. If an account balance is below the materiality threshold, it can be reconciled after closing without impacting the accuracy of your financial statements.  
For example, if your materiality threshold is $10,000, an account that normally has a balance of $400 can easily be delayed and reconciled post-close. This approach allows you to focus on high-risk accounts during the month-end close process.  

Leverage Technology
Tools like Easy Month End can help streamline the reconciliation process, making it easier to complete them quickly and accurately after the ledger is closed. For instance, the software can automate data pulls from your general ledger, reducing the time it takes to prepare reconciliations. This allows you to focus on analysis rather than manual data entry, ensuring both efficiency and accuracy.  

While the pre-close vs. post-close debate will likely continue, post-close reconciliations are generally the best approach. They ensure timely reporting while giving you the time and focus needed to maintain accuracy. By incorporating inbuilt checks, materiality thresholds, and leveraging technology like Easy Month End, you can strike the right balance between speed and precision in your month-end processes.