Reconciliations and Risk – Increasing Visibility and Trusting Your Numbers

Blog post

The reconciliation process sets the standard for all subsequent close activities. However, many find reconciliations to be an extremely stressful process that takes up an excessive amount of time. By moving from a mostly manual process to advanced automation, F&A professionals can begin shifting their focus to strategic initiatives, allocating time to identify new opportunities and genuinely impacting the organization.

In this three-part blog series, we are exploring real-life examples of how organizations are achieving more robust financial reporting by transforming their reconciliation process with technology. Part 1 of our series explored the benefits of standardizing and automating your reconciliation process. In this blog, we’ll dive into phase 2 of financial transformation and look at how visibility can drive continuous improvement within an organization.

Phase 2: Visibility and Trusting Your Numbers

As you know, if there is the ability to see what is going on, there is the opportunity to make positive changes. It is important for finance professionals to be able to trust their numbers but, this can be difficult when there is a lack of transparency across processes. The fundamental purpose of the reconciliation process is to substantiate balances which ultimately will be reported to internal and external stakeholders of the business.

Sadly, trusting financial information is a common challenge for many finance professionals. While it seems like it should be a given that you have confidence in the numbers you present, according to Accenture, “84% of finance managers admitted that they find it difficult to control the quality of financial data across the entire reporting process.”

However, this is not an insurmountable obstacle. Let’s look at a global telecommunications company that partnered with Trintech part way through their financial transformation journey. They already had a fairly standardized process at a global level, and individual types of accounts were being reconciled consistently across the board. However, the organization still lacked a level of visibility to be able to trust the numbers they were reporting. Internally, they recognized the need to have better visibility and oversight of the financial close process if they wanted to enable greater opportunities for continuous improvement. After the implementation of a reconciliation solution, they were able to analyze financial information in ways that were previously difficult.

The Challenge

After having a financial misstatement, attention was focused on the reliability of financial reporting. Much of this fell to the balance sheet reconciliation process. The most senior individuals involved in the reconciliation process needed reassurance that the ending balances of the accounts were reliable and that the global process had been adhered to. For this reason, they were looking for a more complete audit trail, dashboards which showed aging of open items as well as being able to drill into items and see commentary and supporting documentation from previous periods.

How Trintech Helped

As a result, the organization decided to implement Cadency by Trintech across all general accounting teams globally. At the time, a partner at an advisory firm described the implementation to be “like swapping a 40W light bulb for a 100W”, enabling visibility into all corners of the processes. In the end, this enabled the company to have significantly more trust in their numbers.

The ability to have complete visibility enables greater trust in the numbers being reported as well as a platform to support continuous improvement. To be able to report on operational factors, companies can improve on the existing process.

Learn more about the ROI of implementing Cadency by downloading our white paper: The Business Case for Automated Reconciliations.

Read the complete series – Three Practical Phases to Digital Transformation
Part 1: Standardizing Processes
Part 2: Visibility and Trusting Your Numbers
Part 3: Taking a Risk-Based Approach to Automation