1st Dec 2023

Auto-reconciliation: Why it’s reshaping the future for finance leaders

Tom Livock, Payments Expert at AccessPay sat down with Product Experts, Dennis van der Graff and Anita Stamenkovska at Zone&Co, to discuss how automation in statements retrieval & reconciliation supports the strategic objectives of Finance Leaders; Delivering up-to-date accurate information to report back to C-suite and the Board as well as enhancing their organisation’s financial security. They also demonstrate how auto-reconciliation is possible in NetSuite, which can also be applied to all other major ERP and back-office systems.

Double checking is a tried and tested method, a robust review that gives us confidence that we’re not making mistakes. In finance, when we’re reconciling payments and there’s money on the line, we scale this up – into triple checks, senior sign offs, and audits. But however far we take it, it remains a manual process – at the mercy of human error and oversight.

Auto-reconciliation, by contrast, is almost zero error. By using financial software and third-party verification, you can reduce risk, increase security, and bring added efficiencies to business processes – manual and automated alike.


What makes auto-reconciliation better?

The first and most obvious win for automating reconciliation is that you’ll save a lot of time. Less time spent on manual processes means more time available for critical tasks – the ones where humans can add value. This is particularly valuable for smaller businesses which often find themselves in a position where highly skilled senior finance leaders are spending time performing, or at least overseeing, this highly administrative workload – a significant underutilisation of ability.

The second is error prevention. Even the most diligent and experienced financiers can misplace a zero, a decimal point, or a digit in a sort code. Software platforms, especially those with third party checks built into the process, are incapable of making these sorts of errors. However high the volume of transactions and data, the results will always be consistent.

The third – security. Without manual processes, there are fewer human touchpoints where malicious actors or phishing attacks can manipulate data. Payments, matches, and entries can also be flagged on a rule system – which means individual businesses can customise their anti-fraud measures to target sector-specific threats.

But the most valuable outcome of auto-reconciliation is that you will have real time and instant insights into the financial situation of your company. If your bank is always up to date, and you know exactly what is happening bank-side and company-side, you know your liquidity, your liabilities, your assets, that your invoices are being paid on-time, and to the right people – which gives you supreme confidence in your payment processes. You can make informed financial decision from an absolute perspective. Only with proper numbers can you make proper decisions.



Auto-reconciliation in NetSuite

As a real-life example, let’s look at how this would work with AccessPay & ERP giant NetSuite:

Step 1: As a payment file automatically comes into AccessPay, you can see the first step is a validation process – this is validating sort code and account numbers, or BIC and IBAN if it’s a non-UK bank account.

Step 2: The next stage is a security and control step, which checks for erroneous transactions (looking for duplicate or first-time payments). Then, an automated approval process which doesn’t require logging into a bank portal, applying approvals in either AccessPay or NetSuite.

Step 3: The final step is generating a bank ready payment file, which is then delivered by SWIFT, host-to-host, or an API. Which all happens automatically.

When you’re working with bank data, the imperative is to ensure financial data is correct and hasn’t been manipulated. and is transported in a safe way – reason enough to add these extra steps for something money and time can’t buy – confidence in your cash position and peace of mind.


Dashboards, drilldowns, and standardisation with Zone&Co

The duplication of bank statements into your platform, digitised into an interactive format where the data can be more easily visualised and interrogated, makes decision making safer, quicker, and easier. You can perform more complex analysis than you can with a traditional bank statement, by virtue of this digitisation, and act with the confidence that comes from knowing the data is always accurate and up to date.

But even for veteran users of auto-reconciliation, employing a tool like NetSuite, reconciliation is still performed in bulk. Using this method; creating the transactions and matching them with open liabilities, still leaves you open to human error. Utilising true auto-reconciliation, like within Zone& Co’s Reconcile, bank statement files are matched to open transactions by using document numbers or amounts. Differences can also be tracked, and new journal entries automatically created, if discrepancies between paid amounts and open liabilities exist.

With this setup, match rate can reach 80% – 90%, with minimal manual intervention.



What a 90% match rates means for company bottom lines

Dennis van der Graaf, Director of Zone&Co, has years of experience supercharging companies with the power of third party auto-reconciliation. Speaking about the actual business outcomes of all this saved time and energy, Dennis says:

“We see a really big improvement in time spent on reconciliation. I have personally seen examples where companies with 10 employees working on high volume reconciliation processes were able to reduce to just 2 employees. Plus, they never had a backlog and always had real-time data at the end of the day. This level of cost reduction and redeployment of employees to more important tasks is important. There is also a vast reduction in manual errors, they are almost completely eliminated, which gives the company a sense of security that everything is correct.”

Whilst this is an enviable position for any business to find itself in, you may be thinking that deploying three different platforms to achieve auto-reconciliation seems out of reach, or costly, or overkill. But implementation timeframes are minimal – a business can be online and running the same reconciliation process as shown in the above diagram within as a little as four weeks.

For a deeper dive into the benefits of auto-reconciliation, watch our 23-minute webinar here. Hosted by Tom Livock from AccessPay, with expert input from Zone&Co Netsuite pros Dennis van der Graaf and Anita Stamenkovska, we look at just how powerful third-party checks can be for your business.

You can also find out more about auto-reconciliation and automated bank feeds here.

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