Painful Account Reconciliations? The Remedy Is Automation

Rami Ali, Sr. Product Marketing Manager

June 14, 2023

At the end of every week, month, and quarter, accounting teams spend hundreds of hours manually reconciling data in spreadsheets to close the company’s books. This is a tremendous and unnecessary waste of resources given the technology available today.

Is your organization unable to complete the account reconciliation process in a timely manner because the accounting team is inundated with spreadsheets and emails that must be cobbled together manually to match transactions? Then you’re at increased risk of missing transactions, issuing inaccurate financial statements, and falling victim to financial fraud. At minimum you’ll delay the financial close.

Here are three signs that your organization has outgrown using basic tools like spreadsheets and emails to manage account reconciliations:

1. Reconciling Accounts Takes Far Too Long

Manually reviewing account balances and documenting adjustments by sifting through spreadsheets with thousands of rows is cumbersome, painstaking work. The potential for mistakes is high when data is manually entered and moved among systems.

The more steps involved, the more room for error, the more need for checks and double checks. As a result, accounting teams spend far too long on the reconciliation process.

Manually matching transactions from multiple sources may also mean that some GL accounts won’t be reconciled. This approach requires that finance spend weeks uploading, locating, and reconciling transactions manually, one by one. Then accounting leaders must meet with staff to understand the overall status of reconciliation activities, further adding to the time it takes to close the books.

This method also wears down employee morale as people spend large amounts of time on unfulfilling data-entry activities.

NetSuite Account Reconciliation solves this issue by automating manual, time-consuming transaction matching and other repetitive tasks related to reconciliation. Accounting teams can prioritize accounts by risk or value, assign reconciliation tasks to individual team members, and track the progress of each reconciliation.

Low-risk or low-value accounts can be reconciled automatically, without human intervention. Potential discrepancies or anomalies are flagged. Now, accounting staff can focus on high-priority accounts, analysis, and adding strategic value to the organization. NetSuite’s auto-match engine allows millions of transactions to be matched in minutes. Companies can create flexible matching rules for individual transactions or groups of transactions, such as one-to-one, many-to-one, and many-to-many matches. That speeds reconciliations and transaction matching.

2. Low Confidence in Financial Statements

A lack of standardized processes and use of spreadsheets equal uncertainty. Has every account has been reconciled, or were some items been missed or improperly accounted for?

Besides slowing the financial close process, inaccurate reconciliations and financial statements can damage your company’s reputation and even result in fines for misreporting financial results.

NetSuite Account Reconciliation solves this with a seamless integration to NetSuite ERP. Now, all general ledger accounts and balances automatically flow into the application for reconciliations and transaction matching. And, NetSuite Account Reconciliation stores all reconciliation transactions and documents in one place so accounting staff, managers, and auditors can easily access them, eliminating the need to collect documents from multiple sources. This reduces the chances that accountants mix up or overlook certain data or transactions.

NetSuite also ensures all transactions are recorded to the appropriate GL accounts, improving the accuracy and timeliness of financial reporting and accelerating the financial close process.

3. Poor Financial Controls and Compliance Issues

Workflow controls between preparer, reviewer, and final approver are critical. But manually enforcing strong controls during the reconciliation process can actually reduce visibility and ultimately end up increasing the time and money spent.

Accounting teams that reconcile finances manually not only waste valuable staff time, they put the integrity of financial statements at risk and increase the chance of fraud and, ultimately, compliance issues.

NetSuite Account Reconciliation offers a secure document repository that ensures reconciliations are not missing or lost and provides global auditability. The solution logs proof of reconciliations to meet financial control and compliance requirements. Standardized account reconciliation templates, workflows that automate the review and approval process, and built-in segregation of duties improve financial controls and enable auditors to find much of the information they need without any help.

Revolutionize Reconciliations with NetSuite

Accounting leaders need an accurate and efficient reconciliation process that reduces risks and costs while ensuring regulatory compliance and providing a clear audit trail. With that, they can spend more time on data analysis and strategic decision-making, where their expertise is particularly valuable. And, accounting team members can now identify fraudulent and inaccurate transactions without line-by-line reviews.

A cloud-based account reconciliation solution integrated with your financial management system addresses many of the challenges around manual, time-consuming, and error-prone processes so accountants can make more meaningful contributions to the business.

In addition, NetSuite Account Reconciliation provides more than 20 standardized account reconciliation formats and templates for account types, including accounts payable, accounts receivable, intercompany, inventory, accruals, and more. It automatically retrieves balances from the general ledger and carries forward open items from prior periods. NetSuite users can also upload supporting documents and reconciliation items, add comments, view company policies and procedures, and electronically review and sign off on reconciliations.

NetSuite Account Reconciliation is a flexible and easy-to-use solution that extends NetSuite reconciliation functionality by automating reconciliations for all GL accounts and transaction-matching processes. NetSuite enables accounting teams to accelerate the financial close, produce timelier and more accurate financial statements, and reduce major risks.

Learn more about the benefits of automated account reconciliation.(opens in new tab)

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