Why it makes sense to deploy new technology now
Now has never been a better time to review how technology can assist in the multitude of reconciliation practices that necessarily exist across multiple business lines and functions. Many of us have recently closed the 2011 books, and gone through first internal, then external audit. This annual event often reinforces something we inherently know, but all too often fail to act upon as it never seems a priority – streamlining reconciliation processes and practices. Remember that proverb that our parents would teach us all those years ago “A stitch in time saves nine”?
Reconciliation is one of those annoying things that we all have to do with varying degrees of frequency depending upon the level of risk. It can range from daily bank reconciliation to periodic balance sheet account review. Let’s consider the former – bank reconciliation – first. We all inherently know how much easier this task becomes if tackled daily, rather than weekly or monthly. But it still often requires manual effort: downloading the bank statement, getting an extract from the general ledger, maintaining a spreadsheet, following up on exceptions. Wouldn’t it make life easier if all of these could be housed in one place with a greater degree of automation and control? And wouldn’t the same be true for all those other accounts such as payroll, AP, AR and a whole host of other sub-ledgers?
Of course, for many of us, there are also those period end reviews of significant balance sheet accounts to ensure that there are no anomalies exist and, that where some are found, they are dealt with promptly. Similarly, having all balance sheet attestation and account certification activities– whether required by legislation such as Sarbanes-Oxley for public companies, or whether practiced for good financial governance– in one place only serves to make life easier down the road.
Just sit back and think of the myriad of reconciliation activities taking place every month within your business: data matching and comparison, following up on exceptions, management reviews and reporting. Then try to figure out what this is costing annually, and remember to factor in audit and IT costs. It can add up to a tidy sum, quite a number a full time equivalent staff who could be better employed on other revenue generating or higher value tasks.
So what? Well, if you could sweep up all these activities into one place – one solution – you would start to see a multitude of benefits. Firstly, you would reduce operational costs – not a bad thing as the economy starts to pull out of recession and freed funds can be diverted to growth. Secondly, you would be able to highlight earlier and more easily risk situations– both financial and reputational – basically catching things that go wrong or catching them earlier. Thirdly, you get to keep the auditors happy, as you can easily prove compliance with both good financial governance practice and legislative and regulatory requirements. So, is now the time to act to make next year’s close more cost effective and easier? Probably. What better time than to take a look at how an automated reconciliation solution can deliver a triple win.