MosoFin · Inventory to GL reconciliation, in plain words

Is the stock in our books really on the shelves?

Your books say that you hold stock of a certain value. This skill checks if that stock is really on the shelves. If it is not, the skill finds the reason for each difference.

The 20-second version

You give it a period and your count results. It compares three things: the value in your books, the quantity in your stock system and the goods on your shelves. It sorts each difference by its cause. It says which causes the data supports and which need a person to check. It proposes the fixes. It never changes your books.

Three things, not two

The books, the stock system and the shelves

The books hold one value for stock: the inventory account in the general ledger (GL). The stock system holds a quantity and a cost for each item. Accountants call it the subledger. The shelves hold the real goods.

The books GL account 1300 $187,020 The stock system Items module, all locations $186,420 The shelves Physical count 26 September Leg 1: $600 apart software check Leg 2: needs a count tests that goods exist
Example figures for a made-up company, in dollars, at 30 September 2026. Accountants call the comparisons the GL-to-subledger leg and the subledger-to-count leg.

Many small accounting platforms keep the stock system inside the same software as the books. Then the books and the stock system agree "by construction". That agreement proves that the software works. It does not prove that the goods exist. Only a physical count tests that.

For US tax, a business must take a physical inventory at reasonable intervals. It must adjust the book amount of inventory to agree with the actual inventory1. That is an IRS rule for tax returns. Your books and your tax return can differ, so ask your accountant. An accounting textbook says the same about the books: a business with up-to-date stock records still compares a physical count with the recorded balance2.

The mistake it catches

Two figures that agree can still prove nothing

The common shortcut

One platform, books and stock system compared, no count
GL inventory$50,000
Stock system$50,000
Reported as"reconciled"
The two figures come from one database. The result says nothing about the shelves. The skill reports this result as "nil by construction", and never as a reconciliation.

What the skill does

It computes the difference, then asks for the count
GL 1300 Inventory$187,020
Items module$186,420
187,020 − 186,420$600
The difference is not zero, so the skill investigates it. It finds JE-0918: freight of $600, posted by journal entry straight to 1300 on 18 September. The entry did not go through the items module.

The left card uses example figures to show the shortcut. The right card is Northbrook Trading. The skill lists the $600 as a reconciling item until you decide. You can add the $600 to the item costs, or you can move it out of account 1300. Either way, the stock system needs a matching change. The skill posts nothing.

The skill also states the date of the last full count in the header. A perfect match with no recent count is a weak result. If there was never a count, that is the headline finding.

What a run finds

Five items counted at Northbrook Trading on 26 September

This example is the skill's own example: it follows the skill's own read-back. Other pages on this site use Northbrook Trading with different facts. Each Northbrook example stands alone. Northbrook is a trading company in US dollars. It counted its A items (its most important items) on Saturday 26 September 2026. Its rule: investigate any item difference above $500, or a total above $2,000.

ItemLocationSystemCountUnitsUnit $Value $Cause, and what supports it
A-100 Espresso grinderMain120114−685.00−510.00Shrinkage. A recount on Monday 28 September also found 114. The cause is not yet explained
A-110 KettleMain300310+1022.00+220.00Overage. Below $500, so not investigated. No cause found
A-120 BlenderMain200160−4040.00−1,600.00Cut-off. 40 units left on 25 September, but the shipment went into the books on 28 September
A-130 Stand mixerMain / Showroom50 / 044 / 6−6 / +6150.00−900.00 / +900.00Wrong location. Someone moved 6 units but did not record a transfer. Net value 0.00
A-140 Coffee machineMain40400210.000.00Damaged. 3 units are still at full cost. A person checks the condition
Net difference−1,890.00−510 + 220 − 1,600 + 0 + 0
Example figures for a made-up company, in dollars. Value = difference in units × unit cost.

The skill applies the threshold in two tests. Per item, A-100 ($510) and A-120 ($1,600) are above $500, so it investigates them. The two A-130 rows are $900 each, one by one, but their net value effect is nil. In total, the net $1,890 is below $2,000, so the total test passes. The skill does not define the total test. The net total is this page's reading. A-110 ($220) stays on the list, but the skill does not investigate it.

For each difference, the skill says if the data supports the cause or if a person must check it. The dates in the books support the A-120 cut-off. A person must check the shipping log, the damaged units and the cause of the A-100 loss.

The count was on 26 September, but the period ends on 30 September. So the skill rolls the count forward: count, plus goods received, minus goods shipped after the count date. Take care with A-120. The 40 units left before the count, so the skill does not subtract them again. On 30 September the shelves hold 160 and the stock system shows 200 − 40 = 160. A-120 needs no adjustment. It is a timing item inside September, and it is not shrinkage.

Shrinkage, and what is not shrinkage

$510 of loss that a count supports, and three differences that are not shrinkage

Shrinkage is stock that disappears without an identifiable reason, for example theft2. The skill uses the word only where a count supports it. At Northbrook, only A-100 qualifies: 6 × 85.00 = $510.00. The skill checked the data and found no missing receipt and no duplicate. Two checks need people: a search of the storage area and questions to the warehouse team. Northbrook's warehouse lead owns them, and they are still open. So the cause is "not yet explained". The skill does not say "theft".

Of average inventory0.28%510 ÷ 184,200. Average = (181,380 on 31 Aug + 187,020 on 30 Sep) ÷ 2
Of September revenue0.53%510 ÷ 96,000
Trend in account 5150$380 → $510July 380, August 420, September 510 (proposed). The skill gives no industry rate
Unexplained difference

The 3PL: $200

The stock system shows 2,000 C-300 mugs at the Midlands warehouse company (a 3PL). Its statement for 30 September shows 1,950. 50 × 4.00 = $200. The skill reports the difference against the 3PL's statement. Northbrook did not count there, so the skill does not call it shrinkage.

Unexplained difference

Below zero: $84

The stock system shows B-215 Filter pack at −24 units. 24 × 3.50 = $84. A quantity below zero is always wrong. It points to a missing receipt or a duplicate sale. The skill lists it, and every negative quantity, for investigation.

Unexplained difference

The books: $600

JE-0918, the freight entry from the section above. The skill shows it as a decision for you, and does not call it shrinkage.

Cut-off and damaged stock

A bill that came late, and three damaged machines

Harlow Supply sent bill BL-5521, dated Tuesday 29 September, for 60 units × 20.00 = $1,200.00. Someone entered it on Friday 2 October, and the goods arrived on Thursday 1 October. The skill found it because it tests entries posted after the period end, as well as entries dated near it.

Who owned those goods on 30 September? The shipping terms in the purchase contract decide. Under "FOB shipping point", the buyer owns the goods when they leave the seller. Under "FOB destination", the seller owns them until they reach the buyer3. Northbrook did not give the terms. So the skill does not decide. The bill stays an open item until you supply the terms. The bill moved the books and the stock system together, so it causes no difference between them.

Northbrook found damage on three A-140 coffee machines. They cost $210.00 each, and the owner thinks that each can sell for $60.00. US accounting rules value stock at FIFO or average cost at the lower of cost and net realizable value. Net realizable value is about the expected selling price less the costs to sell4. The skill proposes a write-down of 3 × (210 − 60) = $450.00.

The skill also checks the reserve account (1310 Inventory Reserve): opening 4,000 + additions 700 − write-offs 1,100 − releases 0 = $3,600. Account 1310 shows $3,600, so it ties. After the write-down, the reserve would be 3,600 + 450 = $4,050.

The proposals

Six proposals, and none of them posted

The two count changes have a net effect on account 5150 of −510 + 220 = −$290, a net cost of $290. The count changes go into the stock system. A journal entry changes the books but not the item quantities. Next month, that would show a new difference between the books and the stock system.

How a run starts

Nine items, in one message

The skill asks these first, in one short batch. It asks only for what it cannot already see. Item D is a request, not a question.

  1. Use MosoFin for this run, or upload the data yourself?
    MosoFin is the connection to your books and other linked platforms. With it, the skill reads from there. Without it, you upload the files, and the checks are the same. The skill asks only if your account has the MosoFin tools. If not, it says once that the run is manual.
  2. Which period?
    The period sets every balance and the cut-off window. Required.
  3. Is your stock system separate (a warehouse system, a manufacturing system or a 3PL platform), or the item module in your accounting platform?
    This decides what the comparison proves. One system agrees by construction. Required. The skill tests your answer against the data, but you give the final answer.
  4. Please give your count results: the items counted, the quantities and the locations.
    The count is the only part that tests that the goods exist. The count comparison needs it. The skill never guesses a count result. Without a count, it calls no difference shrinkage.
  5. When was your last physical count? How often do you count: all stock once a year, a part each cycle, or never?
    A clean match with no recent count is weak. Required. If there was never a count, that is the headline finding.
  6. Any stock in transit or on consignment, in or out? Give the quantity, the value and the title terms.
    The contract decides who owns the goods, not the location in the system. Recommended. The skill never decides ownership for you.
  7. Does a 3PL hold any of your stock? If so, its statement for the period.
    The skill compares the 3PL's stock with its statement. A person supplies the statement.
  8. Your reserve and write-down policy. If you use standard cost, also your policy for cost variances.
    A write-down needs a policy. The skill can read the balances, but not the policy. Recommended.
  9. Above what amount, per item and in total, must a count difference be investigated?
    Recommended. Without it, the skill lists all differences by value, largest first, and says that it applied no threshold.

Then it reads the plan back and waits for your yes. This is the skill's own read-back:

"Reconciling Northbrook Trading's inventory at 30 September, with the GL and item listing read from your Mosofin connection. The item listing is the same platform's items module, so the GL-to-subledger difference is computed — nil by construction if zero, investigated if not. Count: the A-item cycle count of 26 September you uploaded; last full count 31 December. Stock at the Midlands 3PL checked against its September statement. Shall I go ahead?"

On this page, the last full count is Wednesday 31 December 2025, nine months before the period end.

What you need

Connect once, or upload four kinds of file

Connected with MosoFin

Say yes, then give it what no ledger holds

  • It reads back the workspace and the company file by name, and waits for your yes
  • It checks if you connected a warehouse, manufacturing or 3PL platform. If you connected only the accounting platform, it says that the item module is probably the same database as the books
  • It reads the inventory, reserve, shrinkage and variance accounts, the items, the costs and the locations
  • It reads the transactions near the period end, and anything posted after it
  • You still give it the count, the 3PL statement and the title terms. It cannot read them
Uploading instead

Bring the balances, the items and the count

  • GL inventory balances at period end, by account. A trial balance works. CSV or XLSX, required
  • Item listing at the count date and the period end: item, quantity, unit cost, value, location. CSV or XLSX, required
  • Count results: items, quantities, locations, count date. CSV, XLSX, or count sheets as PDF or image. Required for the count comparison
  • GL detail for the inventory, reserve, shrinkage and variance accounts. Also sales, purchases and bills near the period end, and the chart of accounts. CSV or XLSX, recommended
  • 3PL statement, and in-transit and consignment details with title terms, where they apply. PDF or CSV
  • Period, company name, currency, stock system, last count date and how often you count, typed in the chat. Required. Your reserve and variance policies, recommended

On the upload path, the skill names each file that it received. It says what it read from each file: the date, the number of rows and the totals. It tells you at once about a file that it cannot read, or a file for the wrong period or location.

What you get back

Eight sheets, from the summary to the coverage

SummaryOne system or two, the books-to-system difference, and the date of the last count in the header.
GL to subledgerThe two figures, the difference, and any postings that went around the stock system.
Count variancesEach difference with its cause, and if data supports it or a person must check it.
In-transit and cut-offGoods on the road, and entries near or after the period end.
Write-downs and reservesThe reserve roll-forward and each proposed write-down, with its policy.
GL postingThe proposed entries, marked as proposals for a person to post.
Ledger checksEvery quantity below zero, consignment stock, and the structure of your accounts.
CoverageWhat it read, and what a person supplied. The count shows as manual, with its owner and date.

It asks before it makes an Excel file. If you say no, you get the same sheets as tables. After you see the results, it offers to save your decisions for the next run. Examples are the account map, the locations, the count routine and its owner, and your threshold. It never saves quantities, balances, differences, shrinkage figures, count results or item costs.

What it never does

Six rules that never bend

  • Never reads MosoFin without asking. A connected account is not permission to read it.
  • Never reads anything before you answer the intake items and say yes to the read-back.
  • Never writes, updates or deletes anything, in any system. Every entry that it makes is a proposal for a person to post.
  • Never calls a same-system agreement a reconciliation. It still computes the difference. Zero is "nil by construction". It investigates any other result.
  • Never treats the books as proof that the goods exist. It calls a difference shrinkage only where a count supports it.
  • Never guesses a count result, an owner of goods in transit or the cause of a difference. It never saves quantities, balances, differences, shrinkage figures, count results or item costs.
Words you'll hear

Seven terms, in plain English

General ledger (GL)
Your books. Here, it holds one dollar value for all stock.
Subledger
The stock system: a quantity and a cost for each item.
Nil by construction
A zero difference between two figures from one database. It proves that the software works, and nothing more.
Shrinkage
Stock that disappears without an identifiable reason, for example theft2. The skill uses the word only with a count.
Cut-off
A check that each receipt and shipment is in the right period.
3PL
A third-party logistics company that stores your stock for you.
Net realizable value
About the expected selling price less the costs to sell. Stock can never carry more than this under US rules4.
Sources

Where the facts on this page come from

The sources are an IRS tax publication, two sections of an accounting textbook and a US accounting standard. We found each one on 28 October 2026 in search results. We did not open the pages, so follow each link for today's wording. What the skill does comes from the skill's own files.

  1. IRS: Publication 538, Accounting Periods and Methods (01/2022)A tax source. A business must take a physical inventory at reasonable intervals and adjust the book amount to agree with the actual inventory. A business can keep a book inventory if it follows sound accounting practices. This is a US tax rule, not tax advice.
  2. OpenStax: Principles of Accounting, Volume 1, 6.2 Compare and Contrast Perpetual versus Periodic Inventory SystemsWith up-to-date stock records, a business still compares a physical count with the recorded balance. Differences come from shrinkage, damage, mismanagement or outdated goods. Shrinkage is stock that disappears without an identifiable reason, such as theft.
  3. OpenStax: Principles of Accounting, Volume 1, 6.5 Discuss and Record Transactions Applying the Two Commonly Used Freight-In MethodsThe shipping terms decide who owns goods in transit. Under FOB shipping point, the buyer owns them once they leave the seller. Under FOB destination, the seller owns them until they reach the buyer.
  4. FASB: Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of InventoryA business measures stock at FIFO or average cost at the lower of cost and net realizable value. When that value is below cost, the difference is a loss in that period. This is a US GAAP rule.

No outside authority backs the three legs, "nil by construction", the eight sheets, the investigation threshold or the labels for data and fieldwork. They are the skill's own rules. We made up Northbrook Trading and every figure in the example. All four sources are US sources.

About this skill

This page explains inventory-to-gl-reconciliation, from the MosoFin finance skills library, MosoFin/mosofin-finance-skills on GitHub. Read the skill on GitHub → The skill is in the card format on the main branch. It merged in PR #1 on 26 October 2026, and a commit from the bookkeeping audit followed on 27 October 2026. This page describes that version. Want the worked examples? Learn it step by step →