Modern accounting systems tend to use a number of different processes and procedures, all with ultimately one common goal: to make sure that financial information is received and processed on a timely basis, recorded accurately, verified, and then ultimately put into a database that can be used to populate detailed, easy-to-read reports for both the company and auditors.
Without a doubt, the largest/best known Enterprise Resource Planning (ERP) systems can often do a great job up until the ‘recording’ stage – but what happens then? Any firms still trying to verify these figures and calculations across multiple spreadsheets (and systems) are cooking up a real recipe for disaster for themselves.
All of the automated systems and routines that have been developed for accounting over the years are worthless without a single vital component at the end: reconciliation. The reconciliation process is not only critical for internal reporting, but external auditors will also want to inspect these figures carefully.
Needless to say, auditors will want to know whether your reconciliation calculations were conducted properly, prepared accurately and ultimately delivered on a timely basis. As with many business processes, the choice to let technology take the strain here can be enormously helpful – both in terms of both speed and accuracy.
Therefore as such, not only will auto-reconciliation help to improve the company’s financial reporting and reconciliation process – especially with regard to the new Client Money regulations – but all of these details will also be documented electronically, so that the company’s senior managers, external auditors and industry regulators can review the information at a glance, demonstrating the power of collaboration.
And what exactly are the result? Accuracy can be assured, costly mistakes can be avoided, the process can be audited easily, and the firm can prove that best practice has been followed in this critical area.