Learn Reconciliation Techniques | Data Accuracy, Reconciliation, and Transaction Logic

Reconciliation is a core process in finance that ensures the accuracy of financial records by comparing two sets of related data. In practice, reconciliation often means verifying that the sum of all transactions for an account matches the balance recorded in a summary or master table. This process helps you detect errors, missing entries, or inconsistencies, and is essential for maintaining trustworthy financial statements.


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-- Calculate running balance from transactions and compare to stored balance
SELECT b.account_id, b.balance AS recorded_balance,
    COALESCE(SUM(
        CASE
            WHEN t.txn_type = 'deposit' THEN t.amount
            WHEN t.txn_type = 'withdrawal' THEN -t.amount
            ELSE 0
        END
    ), 0) AS calculated_balance
FROM balances b
LEFT JOIN bank_transactions t ON b.account_id = t.account_id
GROUP BY b.account_id, b.balance;

To reconcile balances, you aggregate all transactions for each account to calculate what the balance should be, then compare this value to the stored balance in the balances table. Aggregation is performed using the SUM function, where deposits are added and withdrawals are subtracted. If the calculated balance matches the recorded balance, the account is reconciled; otherwise, a discrepancy exists.


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-- Identify accounts where calculated and recorded balances do not match
SELECT b.account_id, b.balance AS recorded_balance,
    COALESCE(SUM(
        CASE
            WHEN t.txn_type = 'deposit' THEN t.amount
            WHEN t.txn_type = 'withdrawal' THEN -t.amount
            ELSE 0
        END
    ), 0) AS calculated_balance
FROM balances b
LEFT JOIN bank_transactions t ON b.account_id = t.account_id
GROUP BY b.account_id, b.balance
HAVING b.balance <> COALESCE(SUM(
    CASE
        WHEN t.txn_type = 'deposit' THEN t.amount
        WHEN t.txn_type = 'withdrawal' THEN -t.amount
        ELSE 0
    END
), 0);

When you find accounts with mismatched balances, resolving these discrepancies involves investigating the underlying transactions, checking for missing or duplicate entries, and confirming that all relevant activity has been captured. Sometimes, you may need to adjust the recorded balance or correct the transaction records to restore consistency between the calculated and stored values.

Note

Automated reconciliation tools can streamline this process by continuously matching transactions and balances, flagging discrepancies in real time, and integrating with accounting systems to reduce manual effort and errors.

1. How can you compare calculated and recorded balances in SQL?

2. What SQL function is used to sum transactions for reconciliation?

3. Why might balances not match after reconciliation?

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Section 4. Chapter 3

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              123456789101112
            
-- Calculate running balance from transactions and compare to stored balance
SELECT b.account_id, b.balance AS recorded_balance,
    COALESCE(SUM(
        CASE
            WHEN t.txn_type = 'deposit' THEN t.amount
            WHEN t.txn_type = 'withdrawal' THEN -t.amount
            ELSE 0
        END
    ), 0) AS calculated_balance
FROM balances b
LEFT JOIN bank_transactions t ON b.account_id = t.account_id
GROUP BY b.account_id, b.balance;