Retained earnings, reconciled from opening to closing
Retained earnings should move by net income and dividends and little else, but prior-period adjustments, misposted entries, and year-end closing entries make it easy for the balance to drift. The Accounting Agent reconciles the movement every period and shows you exactly where any difference sits.
What the Accounting Agent prepares
- A reconciliation from opening retained earnings through net income, dividends, and other adjustments to the closing balance
- Net income tied to the income statement for the same period and entity
- Dividends tied to declared amounts and their entries
- Unexpected postings to retained earnings flagged with the entry, user, and date
- A working paper with sign-off, kept with the close task
How it works
- Pull the data. The trial balance, income statement, and equity activity come from your ERP.
- Prepare the work in your logic and format. The Accounting Agent prepares the reconciliation by entity, following your structure.
- Review and approve. You work any flagged items and sign off. If a correcting entry is needed, the Accounting Agent drafts it, and it posts to your ERP only once you approve.
What stays in your control
- Your team decides how each difference is resolved
- Any correcting entry requires approval before it posts
- The reconciliation and sign-off are retained for audit
Standard note
FAQ
What is a retained earnings reconciliation?
It confirms that closing retained earnings equals opening retained earnings plus net income, minus dividends, plus or minus any other adjustments. Differences usually point to entries posted directly to the account. Year-end closing entries, which move net income into retained earnings, are the other common source of confusion.
Why reconcile retained earnings every month?
A misposted entry is easier to fix in the month it happens than during the year-end audit. With an Accounting Agent preparing the reconciliation, the monthly version takes a review rather than a rebuild.
Does it work across entities?
Yes. The Accounting Agent reconciles retained earnings for each entity, and the results feed into your consolidation work. Each entity's reconciliation carries its own sign-off, so a difference is traced to the entity where it started.
