Streamlining Account Reconciliation with RPA

16 Jun, 2020 | Blogs

When manually handling sub-ledgers, large volumes of transactions, and external systems, the risks of errors and duplicated entries increase. According to a survey by EY, as much as 59% of the finance department’s resources are spent on handling transactions-intensive work. The study further claims that 95% of this effort is focused on already matched transactions rather than on entries that require attention. No wonder, manual reconciliation is the most inefficient and demanding process in any company. Despite this, many organizations still reconcile data with pen and paper or Excel spreadsheets. However, this trend is changing, and spreadsheets are slowly making way for automation. Some of the challenges of using Excel spreadsheets over robotic process automation (RPA) are:

Difficult to monitor tasks allocation
Higher governance and compliance risks
Complexities due to simultaneous users
Importing data leads to complicated formatting and programming issues
Higher risk of human error and typos
Cumbersome!

Excel can surely be a short-term solution, but isn’t an ideal one to meet the growing complexity of the reconciliation process. The good news is that many finance departments are waking up to this reality and are streamlining the accounts reconciliation process with RPA. RPA has numerous benefits. To name a few: it shortens the financial close, monitors activities of the team, defines procedures, and requires minimal human intervention, allowing resources to focus on more strategic tasks.

Read how you can measure the ROI of RPA projects

Account reconciliation with RPA gives the finance department real-time visibility of the reconciliation process, ensures compliance, and optimizes performance. As companies grapple with missing reconciliations, unreconciled accounts, and insufficient documentation, many businesses are still wondering if RPA is a good fit for their organization. Below are the three common problems faced by the accounts and finance departments during reconciliation:

Lack of visibility

Manual processes make it extremely difficult to provide real-time visibility into the reconciliation progress or reporting on exceptions.

Fragmented data

Multiple reconciliation formats are a nightmare for anyone trying to assess reconciliations. Standardization is usually difficult to achieve, resulting in fragmented data and error-prone reconciliations.

Higher Inefficiency

Data entry work and manual account reconciliation process like producing reconciliations schedules take up a lot of time, making it a highly inefficient process.

If you have experienced any or all these problems, then it may be time to explore automation for your finance department

Account reconciliation with RPA not only solves these problems, but it also streamlines the entire process while ensuring 100% accuracy. RPA bots can be used to handle repetitive tasks like transaction matching, giving the staff more time to focus on exceptions that need additional attention.

Implementing RPA can speed up the following processes:

Bank reconciliation
Foreign currency accounts
Direct payments
Balance sheet substantiations
Inter-company accounts
External suppliers

Benefits Of Automation:

Account reconciliation with RPA has numerous benefits such as

Robots are independent, implying they save precious man-hours.
Reconciliation history is recorded at all steps, ensuring full traceability.
A streamlined, simplified, and uniform approach regardless of the number of companies, businesses, banks, and accounts.
Better accuracy and higher compliance.
A happy staff that gets time to have a wider strategic role.

Before you begin your automation journey, here are a few things you can do today to improve your entire accounts reconciliation process:

The basic yet the most important step is to extensively analyze your existing month-end/quarter-end close process.
Map out all reconciliations to identify if there is something amiss or if someone is doing double work.
Roles and responsibilities of each staff member in the entire reconciliation process.
Are the processes recorded and what accounts should be focused upon more?
Determine the low hanging fruit in the entire reconciliation – if any transactions can be automated with the least effort and maximum impact.

Making a Case for Robotic Process Automation (RPA): Proof of Concept

Conclusion

Finance departments of leading companies are eliminating the risks associated with manual reconciliation and protecting themselves from expensive mistakes. Automation with RPA shines the brightest among the stars of technologies since it doesn’t disrupt the legacy systems but fully integrates with them. It’s a match that works cohesively to complete the financial close workflow, making the reconciliations more efficient and simpler.

How to get started

Not sure where to start? Contact us today for a complimentary proof of concept (POC). A POC can help you see how automation would work in the confines of your business’ customized environment. It will also help you validate the RPA software and the commitment of the resources involved so that it can be scaled in due course of time.