The finance department is responsible for ensuring the books of a business are accurate and credible. Whether it’s fraud or balance sheet inaccuracies, reconciliation is vital to ensure every business process runs smoothly.
However, the traditional methods of creating reconciliation reports lack efficiency. The process causes delays, and a lot of effort and time gets wasted unnecessarily. It’s not ideal at all, as most businesses still rely on month-end numbers to verify their books.
In this post, we will explore the challenges of creating reconciliation reports and how you can overcome them.
Slow Data Collection for Reconciliation Reports
The reconciliation process is long and laborious. You have to collect receipts, download bank statements, wait for reimbursement figures from employees- it can take a while even to start preparing reconciliation reports.
Additionally, the formats of these varied data sources often don’t match and create issues.
Modern reconciliation software can drastically reduce the time required for data collection. You have several ways to capture data in real-time.
For example, your teams can send scanned images of receipts from the ground using smartphones. You don’t have to wait for them to return to the office and create a report. These e-receipts have become a standard world around and entertained by most tax jurisdictions.
Moreover, employees can file expense claims online using a few steps. The data is ready for reconciliation and approval with a single click.
Reconciliation software can help you automate your data collection and entry. You won’t have to spend hours going through spreadsheets or manually record data.
Inaccurate Financial Impressions
Manual records and data entry leaves the room open for errors. Mistakes are common and can creep into your books without notice. Additionally, moving data between sources and systems increases the risks of inaccuracies. The more steps you have in preparing reconciliation reports, the more you have chances of mistakes.
Fraud is another concern that can prevent you from finding out your actual financial picture.
Automating data entry using your digital reconciliation software is the first step to weed out errors. You can integrate varied data sources and fetch numbers without any mistakes.
Using software even removes the barriers of format mismatch. You can aim for standardization and more accountable reconciliation reports.
For example, you don’t need to convert or even manually record data from a supplier invoice in PDF format. You can directly push the PDF data into your software and approve invoices without recording data without pen or paper.
Limited Traceability in Reconciliation Reports
The reconciliation process doesn’t always get over after creating your reconciliation report. You may need to store and archive your records for auditing in the future.
Storing your reports in hard copies makes it challenging to trace information. You have to pull out many papers to find the right report you are looking for. Additionally, you need storage space for physical files, which is a problem in small offices.
Even if you store spreadsheets on your computer, the process is still slow. You need to go through pages of Excel sheets to verify any information.
The way to resolve this challenge is very simple. You can get rid of the whole pen-and-paper process and store digital copies of your reconciliation reports. A search bar lets you dig into your digital reports, down to the very transaction or amount.
Your records become more trustworthy, and you can easily trace any receipt or invoice. The process even facilitates audits and reduces the time taken traditionally.
Relying on data from countless sources to create your reports causes unavoidable delays. You have to sit with your hands folded unless your traveling reps return from trips to file claims. Or, you can’t do anything till you get your credit card system from the bank.
Most of the time, all the reimbursements and claims come on the last few days of the month. As a result, you can’t prepare your reconciliation report until next month.
Shifting to a digital solution to create your reports is the way to go. Your software will act as the central repository, enabling real-time data collection from the field. You can entertain e-receipts and get claims from employees without waiting.
You will also be able to record card payments as you spend. Reconciliation software can even come with virtual cards to pay your suppliers and subscriptions. Whenever you pay using your card, the data automatically enters your records.
You will be able to create reports faster and eliminate delays from the process.
Digitization is an easy way to remove the challenges from the way of creating reconciliation reports. You can bring down errors, make your books more accountable, and even track frauds.
Creating reports will be quicker, and you won’t have to worry about data collection or manual entry. Your whole reporting process will become reliable, efficient, and accurate.