The accounting glossary
What does tie-out mean in accounting?
A tie-out checks whether a number agrees with its source, a supporting schedule or another financial statement. In a close-review cycle, the team compares the book balance with the supported amount and examines the difference. The expression “the numbers don’t tie out” means those amounts do not agree.
The short answer
A tie-out is a check of numerical agreement. A reconciliation explains how two records agree after identified reconciling items. The terms can overlap in everyday usage, but documenting a reconciliation provides the reasoning behind the tie-out. A zero difference establishes arithmetic agreement; it does not by itself establish completeness, proper classification or sufficient support.
The vocabulary of agreement
| English | French | Reading |
|---|---|---|
| Tie-out | Cadrage | Check the figures agree |
| Tied out | Cadré | No unexplained difference |
| Supported amount | Montant justifié | Amount backed by the work |
| Reconciliation | Rapprochement | Explain agreement between records |
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A fictional $0.40 difference
The evidence for an invoice received after the extract shows $350.00, but the schedule originally contains $349.60. Correcting that input makes the amounts agree. The working paper should retain the explanation and supporting invoice; entering an arbitrary $0.40 balancing line would hide the issue.
| Item | Before correction | After correction |
|---|---|---|
| Book balance | $84,250.00 | $84,250.00 |
| A/P aging | $83,900.00 | $83,900.00 |
| Documented reconciling item | $349.60 | $350.00 |
| Supported total | $84,249.60 | $84,250.00 |
| Difference | $0.40 | $0.00 |
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Investigate the difference before changing the number
First check that the records use the same date, entity, currency and sign convention. Then check additions, duplicates and items posted after the extract. A difference can arise from a timing issue rather than from a missing transaction. The explanation should say which situation applies.
A numerically perfect result can still omit an entire account from both sides. Compare the account population with the ledger and examine the quality of supporting documents. Arithmetic agreement is one question within the review, not the conclusion to every question.
Balance cycles and cut-off cycles need different readings
Close Review brings book balances and supporting work together, with built-in tie-out. Balance cycles are signed off when they tie to their support. Cut-off cycles identify an adjusting amount; the expected difference is explained through the proposed adjustment rather than concealed by a balancing line.
The reviewer remains responsible for the explanation and final approval. Keep the support, proposed adjustment and rechecked balance connected so that the recipient can understand how the file moved from an open difference to an approved result.
Common questions
Does “tied out” mean fully documented?
No. Agreement between amounts is not the same as sufficient evidence. A line needs a description, source and explanation.
Is a tie-out identical to a reconciliation?
A tie-out checks agreement; a reconciliation explains the route to agreement. A reconciliation can contain timing items even when the final tie-out is zero.
Must every difference be removed before review?
Balance differences need resolution. A cut-off adjustment may be the result of the review itself. Explain it and trace the proposed entry rather than forcing a zero.
Sources for further reading
Dated source checks do not replace review by the professional responsible for your engagement.
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