Reconciliation technology has many uses and provides a wide array of tangible (savings) and less tangible benefits (until a problem becomes reality) in terms of mitigating financial transaction-based operational risk. For instance, all organizations, in every market sector, have to reconcile the bank account, but there is so much more value a reconciliation platform can deliver. For this reason we have had, in the last few months, a significant number of clients asking for help with their cash allocations.
Now you would think that the accounts receivable modules of most ERP or financial accounting products would handle this just fine. With my background in ERP solutions before joining the reconciliation solution bandwagon 10 years ago I can confirm that, for the simple matching of incoming payments to invoices, these systems meet basic needs. Let’s be honest, it’s really the same for basic bank rec too; most general ledger systems provide some rudimentary matching and reporting. So why have we had so many clients recently look to ReconArt to being more to the table?
In simple terms they need more: better efficiency, faster cash allocation, improved customer service, reduced processing costs, less errors. They don’t want clerical staff hunting for invoices and manually matching receipts to invoices; they want a much better allocation matching rate where automated functions are even present. And that leads us to why they elect to deploy an automated reconciliation solution, either solely to meet this need while they ponder other uses for the same piece of software, or as a logical extension to the efficiencies they have already gained from the ReconArt™ platform in other areas.
So how? Firstly, our clients with high receivables volumes have been able to match invoices with intra-day bank feeds in a completely automated way. Flexible rules that simply do not exist within traditional AR packages automatically search for matches, while employing lookup functionality to enrich data to gain the greatest level of automation. Using these rules, the system is able to “learn” clients’ payment behavior based upon multiple criteria: oldest first, highest first, partial payments, etc. Better still, as cash is applied, automated feeds and synchronized exports to AR alert agents to the exact position of a client’s account.
Do you recall the last time you received a letter or call asking you to pay a bill that you had already settled? How frustrating was that? Did it help or hinder the supplier’s relationship with you. Think how much better it would have been had they known in advance not to reach out to you. And that’s just one of many reasons why people are deploying ReconArt™ to enhance their receivables processing.