There are currently three ways to reconcile data and only one of the three is really effective. Are you wondering which one it is and why you are not using it right now if it is so recommendable? We tell you about it in this blog post.
Table of contents:
- What is it and what is the importance of reconciliations for companies?
- What type of reconciliations can you perform and what is the best in 2023
- How can you automate your bank reconciliations?
The corporate world is currently experiencing a boom of information resulting in data emerging from different areas of the same business.
In the past, one of the data processes that kept the tension going during the first days of the month while the bank balances were being drawn up was the financial reconciliations themselves, i.e., that what appears in the bank statements is aligned with what is recorded in the accounting books.
The work is extremely thorough and the results of such reconciliations determine the course of many of a company’s financial decisions. Depending on the industry and the size of the company, this action will be more or less complicated.
However, whenever this is done manually, there are some risks, including the fact that the result may not be a true reflection of reality.
In addition, and especially now, companies no longer only have to carry out financial reconciliations, since the data no longer only come out of the accounting books. There are other data that are functional to a company and that, therefore, in the era of Big Data, require an effective administration, management and reconciliation model.
What is it and what is the importance of reconciliations for companies?
Let’s dig a little backwards about what reconciliations are at the corporate level, which will give us the keys to why they are so important (note that we speak in the plural, abandoning the idea that there is only one type of reconciliation).
Data reconciliations are important for companies for several reasons: firstly, if we refer to bank reconciliation, we cannot ignore the fact that through these actions it is possible to know the real financial status of the company and to show the differences between accounting and reality.
In other aspects of a business, data reconciliation can also refer to the comparison between the number of airline tickets issued and passengers boarding an airline, to cite another example, or the number of requests for a service quotation versus service bookings.
In any case, a company that wants to make all opportunities profitable will carry out a reconciliation that will allow it to make better and more effective strategic decisions.
However, as we mentioned at the beginning of this post, there are different ways to reconcile data, and only one of them is the most effective. Let’s give more clarity on this aspect.
What kind of reconciliations can you perform and what is the best in 2023?
It is clear that there are different types of reconciliations, but only three ways to reconcile and only one of them is the best option for companies that want to monetize their business in 2023.
These types of reconciliations at the corporate level are:
- Manual reconciliations
Usually, the Treasury area of a company or some person dedicated to administrative tasks reviews and controls the company’s books with the bank records. This task can take anywhere from weeks to months, depending on whether or not this resource is dedicated or not. Even if you only perform this reconciliation, it is an action that is very susceptible to human error.It is now possible to transfer this example to other areas or industries, such as, for example, an affiliation office of a private health company that provides different services at a regional level and needs to reconcile data on member applications compared to the investment in medical benefits provided.
- Computer reconciliations
This modality is still in the hands of one or more persons responsible for loading data and executing actions. It is carried out in excel spreadsheets that allow to automate, by means of formulas provided by the same software provider, some of the actions on the loaded data. However, it is still a manual action subject to unintentional errors since these data come, in most cases, from PDF spreadsheets that require one or more resources to be allocated to the upload. The time it takes to perform a reconciliation with excel decreases, as well as human errors, compared to the previous case, although not notably.
- Automated reconciliations
The fact that Excel allows to automate some of the actions within the spreadsheet has led to the understanding that it is possible to automate reconciliations with this IT provider, when in fact it is not so.It must be said, although the label is optimistic, this is not a 100% automated action. This is where everyone sighs in despair because they believe that no such solution exists, that if it does, it is costly, difficult to implement, and that companies do not have a trained resource to carry it forward.Automated reconciliations are carried out by means of software that is increasingly capable of working autonomously and intelligently. They do not replace human resources, but on the contrary, they allow them to have a greater concentration on other actions where human skills are required.
Conciliations are necessary and mandatory in the business world, but they involve processes that involve repetitive actions that end up deconcentrating the human brain.
It is worth saying that, in general, the people assigned to these actions usually have more tasks under their responsibility than the reconciliation, so when the time comes to do it ends up becoming a real ordeal, even when all the resources of an office automation program are used.
How can you automate your bank reconciliations?
The answer is simple. You can do it with an enterprise data management software, that is, one that makes it possible to manage the data, cross-reference them and obtain the results in record time, compared to what you have done so far, and all without leaving the same platform.
Do you have to invest more in technological and human resources with exclusive skills and abilities for this? Definitely not.
The same people who until now have been dedicated to carry out the reconciliations of your business can determine the rules by which the algorithms will take information from files of different formats (PDF, txt, xls, csu, etc.) to cross-reference them and provide the information you need to see to make the right decisions.
They just have to be clear about the target and the traceability of the orders. But that’s not all, thanks to the speed of technological developments in relation to the action of data reconciliation, it is also possible to resort to more integrations that enhance the abilities of the same software.
You don’t have to hire different technology providers to get the same solution, you just have to leave the Excel era, make the leap to the automation era and dedicate yourself to increasing the opportunities for profitability, while what used to take weeks or months is finally solved in minutes.
What’s even better is that it not only solves it quickly, but also effectively, since it eliminates unintentional human error and allows that person to spend the rest of the time on other tasks that do need his or her attention.
What do you have to do to get started? Click here and get to know the first and only enterprise data management platform that offers this solution, Conciliac EDM is waiting for you to show you what it can do for your business.