Why Automating Bank Reconciliation Improves Accuracy and Efficiency?

For businesses of all sizes, bank reconciliation is a crucial step in ensuring that financial records accurately represent bank account activity. Reconciliation entails finding and correcting any discrepancies between the balances on a company’s bank statement and its financial records. Manually reconciling a bank statement can be tedious and time-consuming, but with the correct reconciliation solution, it can be automated, saving valuable time and effort.

What is bank reconciliation?

Bank reconciliation is the process of comparing the balances of a company’s financial records, including its general ledger and bank statements, to identify any discrepancies between the two. This process helps ensure that all financial transactions have been recorded accurately and that the company’s financial records are up-to-date and complete.

Why is bank reconciliation important?

Bank reconciliation is important for several reasons. By ensuring that a company’s financial records are accurate, complete, and up-to-date, it helps companies make informed financial decisions with a clear picture of their financial position.

Bank reconciliation also helps identify any errors or fraudulent activities that may have occurred. This is particularly important for businesses that handle large volumes of financial transactions or have multiple bank accounts, as errors and fraudulent activities can quickly result in significant financial losses.

Finally, bank reconciliation helps companies comply with financial regulations and reporting requirements. It provides an accurate and complete record of a company’s financial transactions that can be used to prepare financial statements and reports required by regulatory agencies, such as tax authorities or auditors.

How to automate manual bank reconciliation

Automating bank reconciliation can save businesses valuable time and effort, as well as reduce the risk of errors and fraudulent activities. There are several steps businesses can take to automate bank reconciliation:

1. Choose a bank reconciliation solution: Businesses can choose from a variety of bank reconciliation solutions, ranging from simple spreadsheet templates to more advanced software platforms. When choosing a solution, businesses should consider factors such as the number of bank accounts they have, the volume of financial transactions they handle, and their budget.
2. Connect bank accounts: Once a solution has been selected, businesses need to connect bank accounts to it. This can typically be done by providing the solution with read-only access to the bank accounts. The solution will then automatically import and reconcile bank transactions.
3. Review and approve reconciliations: While automated bank reconciliation can save time and effort, it’s important to review and approve reconciliations regularly to ensure accuracy and completeness. Businesses should also investigate and resolve any discrepancies between their financial records and bank statements promptly.

What are the benefits of automating bank reconciliation?

Automating bank reconciliation offers several benefits for businesses, including:

• Increased accuracy and efficiency: Automating bank reconciliation eliminates the need for manual data entry, reducing the risk of errors and increasing efficiency.
• Time savings: Automating bank reconciliation saves businesses valuable time, allowing teams to focus on other critical business activities.
• Fraud detection: Automating bank reconciliation can help businesses detect fraudulent activities quickly and reduce the risk of financial losses.
• Regulatory compliance: Automating bank reconciliation helps businesses comply with financial regulations and reporting requirements, ensuring an accurate and complete record of financial transactions.

How to automate manual bank reconciliation with the IVP Reconciliation Solution

Bank reconciliation is a critical process for businesses of all sizes, ensuring financial records accurately reflect bank account transactions. While manual bank reconciliation can be time-consuming and tedious, automating bank reconciliation can save valuable time and effort.

The IVP Reconciliation Solution automates key steps in the bank reconciliation process and removes the burden of manually matching transactions, allowing accountants to focus attention on analyzing discrepancies. Key capabilities of the solution include:

• Robust audit trail
• High-volume reconciliations
• Artificial intelligence (AI) and machine learning (ML) that increase efficiency
• Multi-currency transaction support
• Auto-save of records and session data
• Reconciliation of data from unlimited counterparties
• Support for all bank formats
• Adaptive matching rules
• Seamless integration with accounting, portfolio management, and order management systems

Learn more about the IVP Reconciliation Solution or contact sales@ivp.in to schedule a live or online demo.