5 Benefits of Balance Sheet Reconciliation Automation in 2024

For companies closing the books each month, reconciliation is a necessary evil. Matching hundreds or thousands of transactions against invoices and statements is tedious manual work fraught with friction.

In fact, according to research by Aberdeen Group, finance teams spend a staggering 30% of their time on reconciliation tasks. And that‘s just during normal periods, not "busy season" scrambles to meet month-end deadlines.

But manual reconciliation doesn‘t just consume time. Relying on spreadsheets and email chains leads to errors that distort financial reporting. Without real-time visibility, discrepancies go undetected for weeks. Reconciliation bottlenecks delay the close and frustrate finance professionals.

To overcome these challenges, leading organizations are embracing balance sheet reconciliation automation in 2024. This software streamlines reconciliation by:

  • Automating repetitive matching tasks using RPA bots and AI
  • Providing real-time dashboards into the reconciliation process
  • Enabling continuous, automated reconciliation instead of periodic crunch times

Let‘s explore 5 compelling benefits finance teams can realize from reconciliation automation.

How Balance Sheet Reconciliation Software Works

Balance sheet automation software integrates with core accounting systems like NetSuite, SAP, and Oracle. It automatically imports transaction data such as accounts payable, accounts receivable, and bank statements.

Configurable rules match transactions to relevant documentation like invoices and contracts. RPA robots handle repetitive reconciliation tasks like:

  • Logging into accounting systems to extract transaction data
  • Cross-referencing transactions against invoices in AP systems
  • Matching bank statement deposits to AR transactions
  • Comparing amounts and dates across systems

Finance staff oversee exceptions and handle more complex reconciliation scenarios. Real-time dashboards provide visibility into the status of each account, highlight bottlenecks, and track KPIs.

5 Benefits of Automated Reconciliation

Here are 5 compelling benefits organizations can expect from implementing balance sheet reconciliation software:

1. Reduced Workload

Automating repetitive, manual reconciliation tasks delivers massive time savings. Finance staff gain back hours lost in spreadsheet purgatory.

According to research by the Aberdeen Group, finance professionals saved 11% of their time after implementing reconciliation automation. For a 50-person team, that equates to getting back 7,700+ hours annually previously spent on manual reconciliation.

Your finance team can shift focus from mundane data matching to value-added analysis. Automation also takes the dread out of reconciliation at month-end close.

2. Real-Time Verification

Automated reconciliation software matches transactions continuously in real-time instead of periodically. This prevents the last-minute close scramble to reconcile weeks of unreviewed transactions.

Real-time matching improves accuracy by identifying and resolving discrepancies on the spot. According to a study by Kofax, real-time reconciliation reduced exceptions by 60% compared to periodic batch reconciliation.

You gain an up-to-date view of your financial position rather than waiting until month-end to reconcile accounts.

3. Increased Visibility

Reconciliation automation software centralizes the process on a single cloud platform. Real-time dashboards provide visibility into the status of reconciliation across every account.

At a glance, you can view:

  • Percentage of transactions reconciled for each account
  • Number of outstanding exceptions
  • Reconciliation trends over time
  • Which accounts are exceeding service level agreements

These insights enable you to optimize reconciliation workflows. You can identify bottlenecks causing delays, prioritize reconciling high-risk accounts, and allocate team resources more effectively.

4. Improved Accuracy

Manual reconciliation processes are prone to errors that distort financial reporting. Common issues include:

  • Incorrect formulas in spreadsheets
  • Duplicating transactions
  • Mismatched amounts
  • Missed reconciliations

In fact, studies estimate up to 90% of spreadsheets contain errors.

Automating reconciliation minimizes these risks. Software consistently applies business logic and rules across all transactions. This results in up to 100% reduction in reconciliation errors and rework.

5. Standardized Process

Relying on spreadsheets leads to fragmented, inconsistent reconciliation workflows across business units. Reconciliation automation software centralizes and standardizes the process using built-in best practices.

Benefits include:

  • Visibility into a unified reconciliation workflow
  • Consistent matching rules and logic applied to all transactions
  • Standardized exception management and reporting
  • Streamlined period-end close checklists

This simplifies reconciliation for your team while improving compliance and auditability.

Is It Time to Automate Reconciliation?

Balance sheet reconciliation is a mission-critical process for accurate financial closes. But manual, spreadsheet-based methods are no longer sustainable for modern finance teams.

Reconciliation automation software delivers transformative outcomes:

  • 90% reduction in manual reconciliation workload
  • 60% fewer reconciliation exceptions
  • 11% of finance staff time saved
  • Up to 100% elimination of errors

To determine if automation makes sense for your organization, start by assessing reconciliation pain points and bottlenecks. Quantify the time and cost of current methods. This will help build an ROI model for automation software.

With a powerful reconciliation solution, your team can close the books quickly and confidently. Instead of reconciliation headaches, your month-end becomes a non-event.

If you need help building a business case for reconciliation automation or selecting the right software for your needs, I‘m here to help. With over a decade of experience in the industry, I keep a finger on the pulse of the latest solutions and leading practices.