ERP Reconciliation

What is ERP reconciliation?

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ERP reconciliation is the process of verifying that financial data recorded in an Enterprise Resource Planning (ERP) system accurately reflects the underlying transactions from source systems — banks, payment gateways, subledgers, and operational systems. It confirms that what the ERP says happened matches what actually happened.

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ERP reconciliation is not a single activity — it is a category that encompasses bank reconciliation, subledger reconciliation, payment gateway reconciliation, and intercompany reconciliation.

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Why ERP reconciliation matters

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An ERP is only as reliable as the data that goes into it. Data reaches the ERP from multiple sources, and each handoff is a potential point of failure. ERP reconciliation is the control that catches these failures.

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What ERP reconciliation covers

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Bank to ERP. Bank statement balances reconciled to the cash accounts in the ERP general ledger.

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Payment gateway to ERP. Gateway transaction records and settlement reports reconciled to the ERP's revenue and cash entries.

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Subledger to GL. AR, AP, fixed asset, and inventory subledgers reconciled to their corresponding general ledger control accounts.

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Payroll to GL. Payroll system outputs reconciled to GL payroll expense and liability accounts.

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Operational systems to ERP. Sales data from CRM or e-commerce platforms reconciled to revenue entries in the ERP.

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ERP reconciliation in the close cycle

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ERP reconciliation is the backbone of financial close. Every reconciliation activity in the close process is, at its core, verifying a subset of ERP data against an independent source. Getting this right before period end is what makes it possible to lock the GL with confidence.

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Related: Account reconciliation · Bank reconciliation · Payment gateway reconciliation · General ledger