Financial reconciliation compares two sets of data for fidelity and anomalies. Automatic bank reconciliation, or auto-reconciliation, is a new feature that can speed up the accounting process by aligning your financial data with your bank statement and accounting software information and recognizing matching transactions for reconciliation. This means that all the relevant information is in one place, immediately synchronized, without having to manually input the figures into a spreadsheet. Essentially, auto-reconciliation can make accounting and bookkeeping a less labor-intensive chore and easily identify areas in need of further investigation.
According to a survey by EY, up to 59% of resources in the finance department are used to manage transaction-intensive processes. With auto-reconciliation, you can simply download your bank account information to be uploaded to the accounting software. This modernized process is secure via password access and only requires you to verify the information is correctly uploaded. This time-saving method is a great alternative to the laborious task of manually reconciling financial data into an Excel document or even with paper and pen. Instead, auto-reconciliation will check cash outgoings and receipts in your financial records to generate cash flow, income, and capital statements automatically.
As we move towards a more cashless society, and bank transfers become easier, we end up with a greater volume of transactions to track. But more transactions means more time managing your business’s cash flow. While manual financial reconciliation is often at the mercy of human error, auto-reconciliation is an automated process that takes away the guesswork in the accounting process. Even skilled accountants will waste a lot of time with manual reconciliation as it demands a lot of administration. Auto-reconciliation can process more financial data quicker so that your staff can use their time more efficiently.
Reviewing the financial behaviors of the business is a great way to assess potential improvements for your business’s spending habits, budgets, and future investments. For example, by reviewing the reconciliation processes, you can discover opportunities to better the quality and speed of the verification process. Auto-reconciliation enables all the relevant payment information to be compiled onto a digital payment management platform. Once the information is uploaded and formatted to the user’s specifications, you can access in-depth reporting to analyze the business’s financial performance.
With all your financial information easily assembled into one place, the accounting process can rely on advanced software to simplify the accounting process. For instance, calculating your taxes would no longer need to be an arduous process. With an automated process, you can monitor employee activity, define milestones, decrease the financial close and more. Utilizing technology to establish more efficient and more effective financial management will allow you to develop and implement improved strategic procedures and focus on other areas within the business.
Benefits Of Automatic Bank Reconciliation
Time-Saving
Auto-reconciliation is a much quicker process than manual reconciliation. It can analyze the data and compile reports to be reviewed manually rather than inputting each piece of data from a variety of sources by hand.
Avoids Human Error
Manual reconciliation is almost guaranteed to feature errors, particularly if there’s a large volume of transactions. Automated reconciliation is the exact figures downloaded onto accounting software, so it will only require a quick manual review for formatting and unrecognized payments.
Reliable, Transparent Bookkeeping
Auto-reconciliation will ensure all account history is recorded and has a digital ‘paper trail’ with accurate, consistent records, void of human error. You will have a clear trail of exactly what has been done, when, and by whom.
Minimized Fraud
With quick, accurate financial records, you can immediately identify any inconsistencies that need to be investigated. Better financial records will also aid in anti-fraud compliance.
Time Efficiency
Your staff will surely be glad to have such a dull, arduous, and lengthy task off of their plates. Instead, they can use their time more efficiently and delegate administrative responsibility to more effective software.
Easy Access
Everyone can have access to the relevant information in a centralized location, with the data uniformly presented regardless of use at any time in the accounting period. This is particularly advantageous for managing financial data for global operations or businesses with multiple entities.
Duck Creek Payments can connect you to Issuers and payment providers around the globe. By connecting to us, you can easily and quickly partner with your preferred payment providers. Drop us a message below if you would like to know more about how Duck Creek Payments can help your business, our team would love to hear from you.
