How Audits Should Impact Your Approach to the Account Reconciliation Process
Finance and accounting teams know that audits are inevitable – as many say, “it’s not a matter of if, but when.” Knowing this, the office of finance should take a proactive approach to implementing processes and procedures which ensure audit preparedness. By considering what auditors will look for before standardizing your process, you can save a tremendous amount of extra work and headaches when the time to be audited arrives.
When it comes to account reconciliations, the consideration of a future audit means your organization should look to:
- Increase operational efficiencies to ensure timely completion of reconciliations
- Standardize processes to ensure accuracy
- Improve process visibility and reduce risk with detailed audit trails
Additionally, increased scrutiny on finance departments through regulations like the Sarbanes-Oxley Act (SOX) requires public companies to report errors an auditor would classify as “material misstatements” or “material weaknesses”— unless they can prove that they found the error first. Aside from avoiding the need to report on material misstatements or weaknesses, catching errors both in-house and early means you can ensure the data from your reconciliations is accurate and not creating a ripple of risk for the remainder of close processes.
Automating the Account Reconciliation Process
Many organizations currently struggle with time constraints during their account reconciliation process, making the focus on audit preparation a challenging and often secondary concern. Improving processes and considering audits more carefully has historically required investing in more staff to complete the close, and micromanagement for tighter oversight.
Fortunately, there is proven technology available for the office of finance which allows reliable automation of the account reconciliation process to increase both efficiency and accuracy, without the need for additional FTE costs. Automation not only speeds up the process but improves it by considering your company’s respective risk tolerances and reducing errors that manual processes, such as spreadsheets, binders and emails introduce. Additionally, automation reduces the headcount needed to perform the reconciliation process, allowing for more focus on value-adding tasks as your company grows.
Improving Audits with eBinders
When it comes time for an audit, an automation solution like Cadency provides all the information your auditor will need without taking hours away from your teams’ productivity. With Cadency, e-binders allow you to provide auditors with all of the activities and documents necessary to reconstruct a period for auditability. This secure process does not require you to give the auditors a license to your solution but still allows you to quickly pull the information out of the system and produce the appropriate documentation as needed.
Additionally, Cadency allows you to compile and export multiple accounts for the audit report, which allows for easier production of e-binders, increased efficiency and the reduced need to assemble individual binders manually. All of which saves your team valuable time for the continued support of growing the business – even with the auditor is onsite.
Organizations utilizing Cadency have seen up to a 40% reduction in internal audit effort
Utilizing a proven technology solution empowers financial executives with a level of accuracy and insight into the reconciliation process which enables companies to meet shorter close deadlines, maintain accuracy and ensure audit preparedness.
To learn more about how you can take a proactive approach to audits by standardizing and automating your reconciliation processes, check out this eBook.