Bank reconciliation in changing business environments: Challenges and solutions

Bank reconciliation in changing business environments: Challenges and solutions

What are the challenges organizations face when performing bank reconciliation in ever-changing business environments. Here we share solutions and strategies to effectively meet the challenge.

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A business environment can become complex when certain external factors that influence the company are subject to frequent and unpredictable changes. These factors can be of an economic, political, social, technological, environmental, etc. nature.

Changing business environments pose a major challenge for corporations as they make strategic decision making difficult. To meet these challenges, they need to develop the adaptability and flexibility to respond quickly to change.

As more and more companies make strategic decisions based on data, there is a need for a data management method that is efficient and fast. Because these decisions are based on the results of a bank reconciliation, this objective becomes much more challenging.

Companies operating in changing environments must be prepared to adapt to change and make strategic decisions that enable them to thrive.

What is bank reconciliation and why is it important for companies?

Bank reconciliation is the process of comparing a company’s bank transaction records with its accounting records. The objective of bank reconciliation is to ensure that the records are accurate and that there are no discrepancies between them.

For this reason, this process is an essential part of corporate financial management. By ensuring that records are accurate, bank reconciliation helps companies to:

  • Avoid accounting errors
  • Identify frauds and crimes
  • Recover marginal losses due to lack of control
  • Ensure accuracy of financial reporting
  • Make informed financial decisions

What are the common challenges in corporate banking reconciliation?

Common challenges in business bank reconciliation include:

  • Companies with a high volume of transactions may find bank reconciliation a laborious and error-prone process.
  • Bank transactions can be complex, which can make reconciliation difficult.
  • Banks may change their processes frequently, which may require companies to adapt their reconciliation processes.
  • Reports from individual banks and internal systems may come in different formats and with varying data.
  • The clarity and depth of data provided by each entity can make it complex to identify transactions.

These challenges can greatly complicate the reconciliation process and negatively impact the decisions that are made based on this outcome. But for all of these difficulties, there are solutions.

What are effective solutions for bank reconciliation in changing environments?

To address the challenges of bank reconciliation in changing environments, companies must take a proactive approach. This means that companies must:

Implement quality controls:

Companies must implement quality controls to ensure that reconciliation processes are accurate. This is mandatory for those companies that do their bank reconciliations manually because constant review is required to avoid errors that may or may not be unintentional.

Use a bank reconciliation platform:

Having the right technologies available to companies today is a great guarantee of good results. A platform such as Conciliac EDM that contains all the technological solutions in a single platform allows companies to identify and resolve discrepancies more efficiently. And easily overcome the problem of multiple formats.

Improve access to sources:

It is crucial to ensure direct access to data sources, as well as to have tools that allow us to automate the extraction and transformation of data from different sources and formats, so that it can then be available for automatic and effective reconciliation. In this sense Conciliac EDM facilitates a direct integration with other systems and entities that have APIs or databases, and the interpretation and extraction of data from challenging formats such as PDFs, TXTs or CSVs.

Automate the reconciliation process:

Once a company turns to a technology tool, the next step is to automate what has worked well for it. In changing environments, automating processes such as bank reconciliation is a great help for the organization to make a quick and costless adoption. Automation reduces the time and effort required to reconcile bank transactions and is the only viable way to adapt to the growing volume of data.

How to optimize the bank reconciliation process?

By now, you probably already know the answer to this question. However, we invite you to dig a little deeper because companies can optimize the bank reconciliation process by implementing the following strategies:

  • The reconciliation process should be documented and standardized to ensure that all employees follow it in the same way.
  • Responsibilities for the reconciliation process should be assigned to specific individuals or teams.
  • Companies should use appropriate tools and technologies to automate the reconciliation process and minimize the risk of errors.

What technologies can help with business bank reconciliation?

The following technologies can help with business bank reconciliation:

  • Bank reconciliation software is already part of the corporate world and although it can help companies with the reconciliation process and minimize the risk of errors, it is not advisable to hire isolated solutions that sooner or later become part of the error. The ideal is, as is already happening globally, to have a holistic view of solutions with one platform.
  • Enterprise data management platforms help companies integrate and reconcile data from multiple sources.
  • Exponential technologies such as machine learning are increasingly necessary to identify and resolve discrepancies more efficiently.

Bank reconciliation is an essential part of corporate financial management. In changing business environments, companies must take a proactive approach to bank reconciliation to ensure that their records are accurate and that there are no discrepancies.

How can Conciliac help companies optimize bank reconciliation?

Conciliac is an Enterprise Data Management platform that companies use to manage their data and where they can make integrations and transformations from multiple sources to reconcile them, being able to automate the entire process to minimize the time and professional resources allocated to this activity, eliminating errors and allowing better strategic decisions for the business.

Conciliac offers the following advantages for companies seeking to optimize bank reconciliation:

  • Complete automation of the reconciliation process: Conciliac can automate the entire reconciliation process, from the extraction of data from the sources to the resolution of discrepancies.
  • Integration with multiple data sources: Conciliac can integrate data from multiple sources, including bank accounts, ERP systems and means of payment.
  • Data transformation: Conciliac can transform data from different formats and systems so that they can be reconciled.
  • Quality controls: Conciliac includes the ability to create workflows and controls to ensure auditing of the reconciliation process.

If your company is looking to optimize bank reconciliation, Conciliac is a solution worth considering. Don’t be left with any doubts, take a free demo and get to know the platform that will soon become the best business alliance.