Account reconciliation accuracy has become increasingly crucial in today’s business landscape. The need for accuracy in reconciliation and reporting has grown to the point where any significant errors in a quarterly or annual SEC report can force a company to refile or explain its activities, which can be a costly and time-consuming procedure.
Still, account reconciliation is sometimes overlooked in some companies, leading to balance sheet errors and financial report discrepancies.
More importantly, erroneous and inaccurate reporting can lead to significant financial consequences. Enforcing a solid reconciliation process is the only way to build a strong foundation for companies to make strategic decisions, evaluate performance, and comply with rules and reporting regulations.
But more than preventing errors and ensuring accuracy, it is likely to help the business save time and money in the long run.
Account reconciliation corrects problems as early as possible and decreases the risk of significant issues later on. Improving your account reconciliation process minimizes the odds of receiving inaccurate credit card and bank statements, saving businesses time and money.
Here are some helpful best practices for improving account reconciliation.
Simplify Workflows through Automation
Account reconciliation requires multiple steps that involve accountants verifying and certifying various amounts of financial data. The task hand-off between accountants, if done manually, can be time-consuming, inefficient, and prone to errors due to basic human errors.
Accounting process automation software such as PCF cloud ensures that assigned users are informed every step of the way from due date reminders, assignments and approvals, rejections, and completions. As a result, automation is a crucial step toward establishing balance sheet integrity.
General ledger account reconciliations, balance sheet certification, and variance analysis can all be aided by automation. Moreover, in companies with operations spread out across multiple sites, automation can mitigate the risk of error, theft, fraud, and the period, which can take up to sixty days in the event of manual reconciliation.
Streamline the Procedure
Align the beginning balance on the statement to the beginning balance on the bookkeeping software. After that, fill in the final balance, the end date, and any charges or interest income. Then go over your booking records and statements and compare them.
Keep it short by completing one thing at a time: for example, tie withdrawals first and deposits afterward. Reconcile a page or two of statements at a time in the same way. A thing to keep in mind is to complete the most detailed records first, then work on the intricate entries in little segments. Then, if anything is remaining, reduce it down, and it will be easier to straighten out the challenging portions, such as credit card processing issues with bank deposits and merchant statements.
Maintain a Quality Assurance Framework
An integrated FP&A software like PCF cloud establishes a reliable framework for assuring integrity, quality, and thoroughness. It also serves as a quality assurance framework for keeping track of due dates, assignments, and completed tasks.
An adequate account reconciliation approach will focus on the relevant automation for the proper activities and provide management with real-time information about process close dates. Use quality frameworks to improve the completeness and accuracy of various reconciliations and the ease with which they may be reviewed.
Take Advantage of the Cloud
It’s critical to use the cloud to streamline the reconciliation process. Accounting software like PCF Cloud allows accountants to view data from any device with an internet connection.
Even if you’re not in the office, this helpful tool gives you and your coworkers a clear and up-to-date picture of your current reconciliation status and overall closing process.
Not all cloud solutions, however, are made equal. Because systems will contain financial information, ensure ISO 27001 and SSAE 16 Soc 1 Type II are certified. With such certificates in place, you can be assured that your information is safe and secure.
Improve your Account Reconciliation Process with PCF Cloud
It is difficult to prevent human error and mistakes in account reconciliation completely, but emerging innovative software solutions like PCF Cloud significantly lower the chances of errors from happening at all.
PCF Cloud comes equipped with driver-based budgeting, simple to advanced financial consolidation, intuitive budget submission, and approval workflows. More than anything, it’s a competent reporting tool that offers budget roll-up reports and unlimited what-if modeling.
For businesses, it can easily integrate with a variety of ERP systems such as Epicor ERP, iScala, Enterprise, MS NAV, MS AX, MS GP, SAP, and many more.
Learn more about PCF Cloud and how it can transform your business’s account reconciliation process today.