Case Study - Bank reconciliation with ReconArt for Australian retail brand MFG

Transforming bank reconciliation: achieving efficiency in data import, normalization, transaction matching, and exception management

Client profile: a leading Australian fashion retailer

Munro Footwear Group (MFG) is Australia’s leading manufacturer, retailer (including e-commerce) and wholesaler of fashion and comfort footwear. MFG is a family owned enterprise, founded in 1962 to expand into 290+ stores and 2500+ employees nationwide today, operating a dozen of high-quality brands. In the course of its six decades on the market, MFG has nurtured a community of loyal customers and dedicated suppliers. Passion, teamwork, and the old-fashioned customer centric approach are the foundations of the MFG success.

Background and challenges: bank reconciliation needs reinvention

The MFG chain of brick-and-mortar stores was approaching the 200 mark and the online sales channels were also growing robustly. The Finance team were facing increasing complexity of its reconciliations, with large volumes of bank transactions and multiple supported currencies.

The team was handling transaction inflows from a dozen of bank accounts and numerous payment methods. The largest bank account alone was collecting revenues from 150 stores with total entries of 750-900 entries / a day. Batched transactions hitting the bank statement had to be allocated to the corresponding internal sales records.

Four people were involved in account reconciliations. However, the combination of manual data comparison, matching complexity, and growing transaction volumes drained the resources of the accounting department. MFG was searching for a simple and efficient solution that could automate the daily transaction matching and would centralize the bank reconciliations of multiple store locations. 

The client set out clear expectations for the reconciliation transformation project.

• Firstly, measurable efficiency improvements. The adopted solution must fully replace existing labor-intensive manual processes, resulting in one FTE in a capacity to handle automated transaction matching.
• Secondly, the client required a robust exceptions management functionality with flexibility to resolve items within acceptable variance tolerances.
• Thirdly, reconciliations automation was a business critical objective. MFG was rolling out its core ERP system (Infor M3), but its existing reconciliation capabilities were insufficient. The client was not able to move forward unless manual reconciliations were taken out of the equation.

Solution: automated import of normalized bank statement data and scheduled transaction matching

Following an interactive demo focused on bank reconciliation functionalities, the customer was impressed with the range of automation features the system provided. MFG immediately recognized the good fit and were determined to complete the solution implementation within six weeks.

File based integration of ReconArt to the bank messaging system and financial module of the ERP quickly centralized the management of incoming data sources. The customer provides multiple payment methods such as Amex credit card transactions coming from the M3 POS module. ReconArt supports the statement file formats out-of-the-box.

ReconArt has proven its capabilities to handle complex matching relationships in large data sets with ease and accuracy. The full solution configurability allows exact mapping of the existing account structure and process organization into the software. With the help of dynamically updated lookup tables part of the data enrichment features, merchant ID and store ID were assigned to the transaction upon upload in the system, thus enabling the automatic matching and allocation across accounts.

The solution Scheduler triggers and completes the matching operations. ReconArt breaks down grouped transactions and easily recognizes 1-to-many or many-to-many match relationships. The MFG team can refine their match rules to recognize acceptable variances in the amount that used to increase the exceptions pool, but now matched automatically.

Additionally, the instruments of tracking transaction ageing keep the team alert about high-risk outstanding items that need immediate attention. The software apply configurable rules to label recurring discrepancies like processing delays or merchant fees.

Results & benefits: streamlined bank reconciliation ready to scale up

With ReconArt, the MFG finance team enjoy fully automated and streamlined reconciliation processes with significant time savings, less clutter, and boosted team productivity.

ReconArt accommodates a higher frequency of reconciliations and continuous accounting to prevent the pressure of period-end close deadlines. The streamlined reporting and investigation of exceptions have resulted in improved resolution rates, account visibility and control.

Today MFG leverages a user-friendly tool that allows them change or expand the scope of reconciliations independently. Process bottlenecks are spotted easily and the team focuses on high-level process management.