Reconciling your accounts receivables is vital, not only because it safeguards against lost or misallocated funds, but also because it provides essential financial information. However, it is also a mundane, time-consuming task—perhaps because of the age of computers and instant information. Yet, no matter how much you grimace and protest, your reconciliation must get done one way or another, and automated account reconciliation can help.
On the surface, the data-matching payments with corresponding accounts is relatively straightforward, no matter how tedious. Mismatched or unallocated payments is the part that really frustrates finance professionals.
You might run into certain problems while reconciling your accounts receivables. Here are two common roadblocks:
Consider this—while matching payments with accounts receivables, you find a peculiar payment in your bank statement from an external account. It has no account or invoice number, and the amount potentially relates the total of the payments instead of the individual payments. As you probably know, you must double-check with the bank and find out which company owns the account. Then, you need to check the outstanding balance owed by that customer to find out which invoice they were paying. In some cases, you might be left to wonder if a credit invoice has been deducted from the total.
All these complications might leave you pulling out your hair in frustration. And more bad news – you will continually experience the same irritating, long-winded process if the customer pays the same way every month.
What if, instead of an unidentified payment, a customer paid the wrong amount? Even if the amount is a mere dollar off, the amounts won’t match. You would need to manually reconcile your sales ledger—a tiresome process—to fix the discrepancy.
Automating your financial reconciliation process is vital for companies with a high volume of transactions. It cuts reconciliation time down from days to hours, reduces errors associated with manual reconciliation, and can consolidate multiple file formats into a single file type. And, the longer you use automated account reconciliation software, the more it learns, and the faster your process will be in the future.
Scenario #1 Solved: Automated account reconciliation software has the unique ability to link each bank account to a specific customer, so when the bank statement is imported, the tool automatically lists only that customer’s invoices and suggests both debit and credit transaction that match that amount. Instead of a lengthy, mind-numbing process, you’re left with all the hair on your head.
Scenario #2 Solved: Instead of manually reconciling your sales ledger, automate your reconciliation process. If a customer happened to pay the wrong amount, the robotics would immediately recognize it and issue a book order to balance the amount.
Transform your process today by checking out our account reconciliation solutions!
Written by: Ashton Mathai