> For the complete documentation index, see [llms.txt](https://kb.theloops.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://kb.theloops.io/digitalworkers/ifs-loops-digital-workers/digital-worker-guides/reconciliation-manager/core-concepts/fundamentals.md).

# Fundamentals

## Overview&#x20;

The Reconciliation Manager is an AI-powered Digital Worker that matches, substantiates and certifies balance sheet accounts, producing the audit evidence as it works rather than after the close. At launch, it covers two account types: general ledger control and clearing accounts, and bank accounts reconciled against the cash book.&#x20;

Matching is deterministic: rules decide what matches, so the same inputs always give the same result and every match can be explained. Clean, unambiguous matches clear automatically. Items that do not match cleanly are scored, and the ones needing judgement go to a person with the reasoning shown, not a number to accept. Substantiation goes further than matching alone: each balance is proved against its supporting record, and the evidence is captured at the moment the work is done. Match records are held in the platform, and nothing is written back to IFS Cloud until a person approves it.&#x20;

## Key Benefits&#x20;

**Evidence produced at source:** The audit pack is created by the work itself, not assembled from files and mail threads after the close. By the time an auditor asks, the evidence already exists.&#x20;

**Explanations that hold up:** Matching is deterministic, so the same inputs give the same result every time and every match can be defended, rather than depending on who happened to review it.&#x20;

**Close effort released:** Accountants move from matching lines in spreadsheets to resolving the items that genuinely need judgement, since the routine volume clears unattended.&#x20;

**Proves the hard accounts:** Accounts with no subledger behind them, accruals, provisions, suspense and clearing, get the same rigor as accounts payable and receivable, which tie out on their own.&#x20;

**Nothing posts without sign-off:** Match records are held in the platform. The Reconciliation Manager prepares; a person approves before anything reaches IFS Cloud.&#x20;

## The Challenge It Solves&#x20;

Not every balance sheet account is equally hard to prove. Payables and receivables have a subledger behind them, an itemized list that can be reported and tied, so that work is largely automated already. Accruals, provisions, suspense and clearing accounts, and contract balances have no such list. The balance is a bare number, and proving what it is made of means reconstructing it from free-text journal entries, month after month.&#x20;

Today, that work happens outside the ledger. Statements are downloaded, pasted into spreadsheets, and matched by hand. Differences are chased by email, so the reason a balance moved ends up in an inbox rather than against the account. The cost is not only the matching itself: the close runs long because the same accounts block it every period, and the audit pack is rebuilt afterward from files and mail threads, at the point when the evidence is hardest to find.&#x20;

## Before and After&#x20;

#### Before&#x20;

Before the Reconciliation Manager, closing out a balance sheet account requires manual effort at every stage:&#x20;

{% stepper %}
{% step %}
Download bank and supplier statements, or export ledger transactions, into a spreadsheet outside the ledger&#x20;
{% endstep %}

{% step %}
Match transactions or statement lines by hand, line by line&#x20;
{% endstep %}

{% step %}
Chase differences by email, with the reason for any gap living in an inbox rather than against the account&#x20;
{% endstep %}

{% step %}
Agree a balance once the number ties, with the supporting proof held in separate files&#x20;
{% endstep %}

{% step %}
Rebuild the audit pack after the close from files and mail threads, when the evidence is hardest to find&#x20;
{% endstep %}
{% endstepper %}

#### After&#x20;

With the Reconciliation Manager, the same process runs automatically:&#x20;

{% stepper %}
{% step %}
Every balance sheet account due for the period is scoped at once, across entities and currencies&#x20;
{% endstep %}

{% step %}
Ledger transactions and incoming bank statements are matched by deterministic rule, so the same inputs always give the same result&#x20;
{% endstep %}

{% step %}
Unambiguous matches clear automatically; what doesn’t clear is scored, with the reason travelling with it&#x20;
{% endstep %}

{% step %}
Items needing judgement are sent to a person, with the reasoning already shown&#x20;
{% endstep %}

{% step %}
Once a reviewer approves a match, the record is written and the balance is substantiated against its supporting evidence&#x20;
{% endstep %}

{% step %}
The audit pack already exists, because the evidence was produced by the work itself&#x20;
{% endstep %}
{% endstepper %}

## How It Works&#x20;

The Reconciliation Manager follows the same core sequence for every account: scope, match, score, review, substantiate.&#x20;

**Scope the period:** At the start of the period, every balance sheet account due is scoped at once, across entities and currencies.&#x20;

**Match by rule:** For general ledger accounts, the Reconciliation Manager reads ledger transactions and compares them field by field, grouping the ones that belong together and pairing a debit against a credit. For bank accounts, statements arrive by email; the worker reads each format and matches statement lines against cash book transactions.&#x20;

**Clear by rule, score the rest:** Unambiguous, rule-based matches clear automatically. Everything else is scored, and the reason for the score travels with it, whether that is a timing difference, a fee, or something that needs a closer look.&#x20;

**Review and approve:** Every group that did not clear automatically is marked for review, so the Reconciliation Manager proposes and the finance user decides. Nothing is written back to IFS Cloud until a person approves it.&#x20;

**Substantiate:** Once a match is approved, the worker moves on to substantiating the balance, proving it against its supporting evidence rather than only confirming that the total ties.&#x20;

## What Triggers the Reconciliation Manager&#x20;

**Period open:** At the start of an accounting period, the Reconciliation Manager scopes every balance sheet account due across entities and currencies.&#x20;

**Bank statements arriving by email:** A finance user can hand over a statement with a plain-language instruction, one account, one period, with no form to fill in and no rules to configure. The worker loads the statement into IFS Cloud and runs automatic matching against cash transactions.&#x20;

**Unmatched ledger transactions:** On a general ledger account, a list of unmatched transactions triggers the matching process, grouping debits against credits and showing the evidence, transfer identifier, amount, voucher number, voucher date, currency and transaction code, for why each group belongs together.&#x20;

**Items that do not match cleanly:** Anything that cannot be cleared by rule is scored and routed for review, with the reasoning shown alongside it.&#x20;