Manual reconciliation is an outdated process for businesses to manage their finances. It involves a manual process of matching transactions and can take hours, days, or even weeks to complete. As business operations become more complex and time-consuming, it’s time to say goodbye to manual reconciliation and embrace the modern technology that is available today.
It’s no wonder that many companies are looking to banish the manual reconciliation process entirely and take advantage of more efficient solutions. The good news is, there are plenty of reasons why it’s time to switch up your bookkeeping system.
Manual Reconciliation Challenges: Wasted Time
Manual reconciliation, according to PYMNTS, is at the top of the list of payment headaches executives are facing currently. There are several challenges that stem from continuing manual reconciliation practices.
The first challenge is wasted time. Having members of your staff spend hours upon hours every week or month updating spreadsheets and entering financial data manually is a big waste of time. When it comes to determining which tasks are best suited for people and which can be relegated to software or other automated or technology-based systems, it’s important to think about the value of that work when it’s being done by a staff member – is it something that requires nuanced thought, collaboration, or other processes that can’t be replicated by a machine? Then it needs to be done manually. But data entry and financial spreadsheet creation and maintenance don’t.
Human Error and Increased Risks
One big reason is that manual reconciliation often increases human error and risks. Having a single person recording your financial account information can create issues with the quality of data. People make mistakes – hit the wrong button, accidentally delete previously entered data, update the wrong version of the spreadsheet, the list is endless. And this creates an increased risk of your business having inaccurate or incomplete data, sometimes for years.
Manual Reconciliation Isn’t Easily Scalable
Manual reconciliation also offers no scalability or advanced capabilities – if you suddenly are doing half or triple the sales, you can’t just scale your reconciliation staff up and down in a month. And if you need to implement a change retroactively or reorient your financial reporting strategy, those subsequent operations often create more issues than it solves.
Reconciliation Automation Benefits
Productivity, one of the top business growth objectives, only becomes more important as we navigate tough market forecasts, labor shortages, and a staggering number of individuals working for themselves and holding down multiple jobs.
For those in leadership, productivity is often a barometer your business owners use to measure your success in your role. And since budgets and resources (like staffing) are essential to creating a productive and successful business environment, that means each business practice and process should always use the optimal tools and include the input of your skilled employees.
If reconciliation is automated and updated without manual inputs, you can quickly increase the productivity of your financial department employees and processes.
Replacing manual reconciliation with automated tools also helps provide real-time insight. You can see exactly where your accounts stand at any time, no need to wait for the next shift to end and for your data entry crew to go home for the evening before you can check whether that big account payment you were expecting has come through yet.
Reconciliation automation also reduces fraud. PwC’s Global Economic Crime and Fraud Survey found that 51% of the organizations they surveyed reported experiencing fraud in the past 2 years, a 20-year high.
With automated and real-time processing solutions, your team can catch errors and anomalies much faster, which can help mitigate damage and even allow you to implement other protocols to minimize the risk of these fraudulent transactions even reaching your business.
Real-Time Reports and Reconciliation Enhance Your Operations
Access to real-time accounting details is one of the best ways to keep your business running smoothly. When you know where you stand financially, at any given moment on any day, you can make smarter decisions, mitigate risks, fix errors, and create a more efficient operation.
Automated and real-time reporting systems are also way more cost-effective than manual reporting. Automated reporting systems consistently are shown to reduce your employees’ time spent on reconciliation by 95%!
ReliaFund offers real-time reports and reconciliation so you can always know exactly where you stand. Our tools are easy to use and help you track ACH, credit card, and other electronic payments without the hassle of manual reconciliation.
At any time you can see when ACH transactions move from “pending” to “funded” to “settled,” and view approved, pending, voided, and settled electronic transactions. This helps solve so many other manual reconciliation problems with just one feature.
Step away from the manual spreadsheets and reach out to our world-class customer support at ReliaFund today.