Automating financial reconciliation can help companies save time on their record-keeping while also increasing accuracy and transparency. It can support a wide range of companies, increasing their efficiency and streamlining their processes.
Yet not everybody realises the impact that automatic reconciliation can have. Some don’t even realise it’s a possibility. If you aren’t sure whether it could benefit your business and record ke
At its most basic, financial reconciliation is where bank account records and figures in your accounting package are compared to make sure they match. It highlights any discrepancies so they can be investigated and resolved before they cause a major problem.
Most companies do reconciliations once a month, in line with monthly account statements sent by the bank. However, some companies do it more frequently as the fewer transactions there are, the easier it is to spot inconsistencies.
Manual reconciliation takes a lot of time and effort. With automatic reconciliation, your accounting software and specialised add-ons carry out the process for you. This brings a lot of benefits to every business – here are the ones most commonly reported.
Automatic reconciliation is a quick process. All outgoings and receipts are rapidly checked against bank account records and your accounting software to make sure everything matches. This means you don’t need to waste staff hours pouring over receipts, statements or cross-referencing spreadsheets.
You can also save on staff time spent chasing down where mistakes have occurred.
Humans will inevitably make mistakes – no matter how razor-sharp their attention to detail is.
Trawling through spreadsheets or paper-based records to cross-reference figures is a tedious job too, so this increases the chances of errors even more. And it only takes one misread figure, skipped sum or even displaced decimal point to completely change an outcome.
Automatic reconciliation removes this risk. Perfectly programmed software isn’t going to skip a step, or overlook a number – instead, its algorithmic precision will let any anomalies be easily spotted and swiftly corrected.
This increased level of accuracy means you can be confident that your accounts are always consistent and correct. Not only will you be able to easily find any instances of monies going into the wrong account, but you will also have the assurance that any critical financial decisions are based on current and accurate information.
Because it’s accurate and fast, automated reconciliation will also help guard against fraud. Any irregularities will be quickly picked up so they can be investigated without delay. This means that even if fraud does happen, it is likely to be at lower levels and thus less damaging to your business.
Manual reconciliation is laborious and repetitive. But automation makes it less arduous for staff. There’s no need to go through massive folders of printouts or to open a series of spreadsheets so that figures can be manually checked. This maintains team motivation and staff satisfaction, as staff are relieved of the repetitive manual work and can concentrate on other tasks.
During the reconciliation process, an automated system means that everyone can clearly see the progress that is being made towards the month-end close in one place.
No need for separate or repeated calls and meetings to share updates or find out what still needs to be done. This is especially important for global companies, or ones with multiple entities. It gives much better visibility, giving a clear view of every transaction that has been processed so anyone with permissions can check.
Checking that key sets of figures are accurate and marry up is a critical responsibility of the Finance function. Getting it right means that a company can be certain that its financial accounts are accurate and consistent.
Companies need to put robust processes in place, and automating reconciliation speeds the process up and ensures confidence in financial reporting and the department as a whole.
NetSuite, the cloud ERP system that unifies business financial management, was named a Leader in Gartner’s 2020 Magic Quadrant for Cloud Core Financial Management report. It is designed to give you visibility and control over your financial accounting, streamlining processes and delivering insight into your business data. In tandem with NetSuite, Adra by Trintech brings enhanced automatic reconciliation that simplifies your financial close.
For a demonstration or more information, contact us.
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