Direct answer: A controller reviews whether balances are supported, revenue and costs follow the reporting policies, inventory and intercompany accounts reconcile, estimates are documented, approvals are traceable, report versions are controlled and significant differences receive follow-up. Bank reconciliation is only one part of that work.
Balanced entries do not establish that the accounting reflects the business. Duplicate expenses, unsupported inventory and unresolved intercompany amounts can remain in a technically balanced ledger.
1. Support the balance sheet
Connect significant balances — cash, receivables, payables, prepayments, inventory and major liabilities — to reconciliations, contracts, schedules or calculations. Long-standing miscellaneous receivables need a counterparty, an explanation and a resolution plan.
2. Review revenue and cost timing
Receipt or payment dates do not necessarily determine financial reporting treatment. Apply the business's reporting policies to delivery, service periods, returns and related costs. Financial reporting and tax accounting methods require separate consideration (see cash vs. accrual and Form 3115).
3. Explain inventory and intercompany differences
Check locations, quantities, ownership, goods in transit and returns. Reconcile counterparties, currencies, dates and transaction types with headquarters. Preserve a list of differences rather than forcing agreement with an unexplained entry.
4. Review estimates and manual adjustments
Record the method, supporting information, reviewer and subsequent validation for accruals, allowances and other estimates. Significant or unusual entries need a business explanation; an unsupported "management adjustment" is hard to defend at the next close or an external review.
5. Control vendor changes and payments
Creating a vendor, changing bank information, preparing a payment and approving it are different responsibilities. Design proportionate verification and review, particularly for bank-detail changes. Management's approval role does not automatically transfer to an external controller.
6. Control reporting versions
Final reports need release status, a version and review evidence. Post-close changes should explain the reason, impact and renewed review, with affected users notified — otherwise headquarters may use one version of profit while the bank sees another balance sheet.
7. Turn findings into action
A review log should not just say "reviewed". Record the issue, impact, cause, owner, next step and deadline. Repeated adjustments usually indicate a process problem that deserves attention before the next close.
Suppose bank accounts reconcile but a 3PL inventory report omits returned goods. The controller first obtains return and ownership records and determines the accounting implications; CFO analysis of replenishment and cash then has a more reliable base. This is a hypothetical illustration, not a client account.
These seven checks are the core of the monthly work of a fractional controller, and pair with the ten-day close calendar and the monthly close playbook.
