You're faced with conflicting income reports. How do you reconcile the client's financial records?

To reconcile conflicting income reports, I will begin by reviewing all source documents such as invoices, bank statements, and contracts. I will compare reported figures across accounting systems and identify discrepancies. Discussions with the client help clarify unusual entries or timing issues. Then will adjust records where necessary, ensuring consistency and accuracy, and document all findings for audit trails and transparency.

Don’t just gather documents. Validate the source and timing of each. Is the invoice date aligned with service delivery? Was a payment received via wire or check? Also, check for income reported outside the main books, like manual journal entries or cash transactions that don’t show up in your accounting software. These edge cases often hold the key to resolving discrepancies.

Collect all relevant records: bank statements, invoices, sales reports, accounting software exports, and client spreadsheets. Ensure you’re working with complete and current data.

When faced with conflicting income reports, the first step is to stay objective and methodical. Start by identifying the source documents for each report—bank statements, invoices, contracts, and receipts. Compare these against the general ledger to spot discrepancies. Then, trace each figure back to its origin to see if it’s due to timing differences, data entry errors, or misclassification. Communicate with the client or relevant departments to clarify any assumptions or missing context. If needed, request supporting documentation to validate the correct figures. Once verified, adjust the records accordingly and document the reconciliation steps for audit trails. Accuracy and transparency are your priorities here.

Start with source documents: bank statements, sales reports, POS exports, invoices, and prior reconciliations. Ensure you're looking at original, unaltered data from both the internal books and third-party systems (like payment processors). If the data sources aren’t complete or consistent, stop and fix that first—bad data leads to bad conclusions.

It is necessary to review the amounts entered as income on the reports and the amounts found in the bank accounts. Any discrepancies between what is reported as income and what actually went into the bank account indicate an error. This step is crucial because it highlights where the numbers don't match.

When comparing records, automate where you can. Tools like Excel’s Power Query or reconciliation plugins in QuickBooks can save hours. But don’t trust software blindly; spot-check anomalies. And remember, timing differences (like late deposits or early revenue recognition) can skew comparisons if not accounted for.

Run side-by-side comparisons: → What the books show vs. what the bank or merchant statements reflect → What’s recorded on accrual vs. cash basis → What timing differences (e.g., deposits recorded late, sales returns, chargebacks) might exist Use pivot tables or reconciliation tools to spot gaps or duplicates quickly.

Line up internal and external sources side-by-side. Look for discrepancies between reported income, deposits, and sales entries across systems (e.g., POS vs. accounting software).

Zoom out before zooming in. First, look for pattern-based mismatches like repeated errors in how a particular client’s payments were recorded. Then dive into line items. And don’t ignore small variances, they often signal system sync errors, such as rounding differences between integrated tools or currency conversion mistakes.

This is detective work. Look for: ✔ Duplicate income entries ✔ Missing deposits (especially if batching is used) ✔ Timing mismatches (e.g., revenue recognized before cash received) ✔ Misclassified revenue (income coded as a loan or refund) Context matters here—ask questions if something feels off. Don't assume it's an error until it’s verified.

Pinpoint mismatches, such as duplicate entries, missing invoices, incorrect dates, or miscategorized income. Flag these for review and dig into their origin.

I like to start with reviewing the balance sheet, ensuring no bank or credit card or loan or receivable is missing, as that effects the income ultimately. The run a general ledger report to review the content of each account for discrepancies. Like this you will detect the errors.

Once discrepancies are identified, post adjustments clearly and transparently. → Use journal entries with supporting memos → Correct only after verifying the source of the error → Consider adding adjusting entries in a separate "adjustments" journal for audit clarity Every change should be documented—this is part of your audit trail.

Make corrections based on evidence: reclassify transactions, post missed entries, or remove duplicates. Document every change to ensure traceability.

Always have a paper trail when making adjustments. Note why the change is happening, reference the source document, and make sure your accounting software reflects the corrected entry. If you’re working in a team, get a second set of eyes on it. A small adjustment now can save a bigger headache later if it’s reviewed thoroughly.

Finally, validate that your revised reports: ✔ Tie to external statements ✔ Match cash flow reality ✔ Reflect the client’s business logic (e.g., if monthly revenue suddenly jumps, there should be a reason) If possible, run the revised financials past the client or internal stakeholders to confirm accuracy.

Re-run reports after adjustments and cross-check them with original sources to confirm that discrepancies have been resolved.

Share a clear summary with the client: what the discrepancies were, how they were corrected, and what systems or processes might need improvement to prevent recurrence