By letting technology take over, you save time, reduce costs and work more efficiently. In account departments a great deal of the work of closing the accounts is still being done manually. Manual handling of transactions and reporting accounts is one of the most time-consuming processes of all.
Let us look at an example:
A customer receives 100 payments 3 times a week
The customer spends two minutes to reconcile each line manually
Total time consumption 600 minutes = 10 hours per week!
Bank reconciliation – a company’s most important financial process
Bank reconciliation is a company’s most important reconciliation process. It can differ depending on activity. Many continue to reconcile their bank accounts by printing out statements. With the help of a pocket calculator and pencil they go through all entries in the account to see which are open. Others use Excel as a tool to eliminate the items, which match through summaries and macros.
The efficiency and accuracy of manual reconciliation depend entirely on the person performing it. When the reconciliation is complete, all balances in the ledger and bank plus any differences have to be reported. This is often done in an external system outside the account system in spreadsheets and then reconciliation results can be transferred manually into the accounts. This potentially results in errors and misunderstandings and as a result of this additional internal time consumption.
Reconciliation automated and based on electronic bank files
By using software to automate and handle import of electronic bank statements you can eliminate manual processes. AMC-Banking supports import of bank statements from a huge number of banks and replaces the manual reconciliation process with technology – a consistent, effective reconciliation process for all accounts directly inside the ERP-system.
Another very import functionality is the ability to reconcile payments, which do not have a unique payment reference, which uniquely can be recognized in the ERP-system. AMC-Banking has a build in algorithm, which looks into different parameters, and compares them with data from the ERP-system and assigns each line with a three level match: high, medium and low. In general a match level above 80 per cent is to be considered a high match level when using electronic bank reconciliation.
If we use the above example, the calculation will be:
A customer receives 100 payments 3 times a week
AMC Banking can recognize 86% of the payments received from the electronic bank files
Time saving = 86% from 10 hours = 8.6 hours per week!
Manual procedure:
- Personnel dependent
- Inefficient and time-consuming
- No history or opportunity to look back
- Many manual steps make the process unsafe
- All steps must be implemented for all accounts and by all personnel involved
Automatic reconciliation:
- A fully automatic reconciliation process
- Personnel independent – delegated responsibility
- Automatic final account specifications
- All processes related to reconciliation are handled inside the ERP-system
- Possibility to handle payments with or without payment references
- All reconciliation history recorded
- Uniform approach irrespective of number of companies, banks, business and accounts