Accounting reconciliation: how to improve this process?
Publié
Le 11/10/2022, par :
- Anne Marie Diom
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Contexte
The accounting team is often considered the backbone of a business. However, only a few companies equip their accounting department with a flexible and scalable accounting reconciliation system that allows them to support organizational changes in real time or respond to rapid growth.
Let’s take a closer look at what a “scalable accounting reconciliation system” is and why it is important in your business. We will guide you in your digital transformation through all the aspects that could help you better understand the importance of a scalable accounting reconciliation system.
What is a scalable accounting reconciliation system?
A “scalable” reconciliation system can handle additional work without affecting your business performance. It is flexible enough to increase or decrease the system’s production and consumption based on the current development of the organization.
Most reconciliation systems offered on the current market cannot offer such flexibility to the user, which leaves the accounting team with no choice but to perform reconciliation under unreasonable risk on its financial statements, especially in the face of an unstable growth phase.
Why do you need a scalable accounting reconciliation system?
Accounting reconciliation ensures the sustainable financial health of a business with accurate and reliable financial management control.
Your reconciliation management must align with your business ambition as your business grows. A scalable reconciliation system can overcome the complex challenge of reconciling high-volume transactions, regardless of currency types, points of sale, or payment methods. It seamlessly removes the hurdle of the traditional legacy system and completely replaces the manual spreadsheet of the reconciliation process.
In short, it is the best choice of reconciliation system for a business determined to grow and thrive in all circumstances.
When to implement your scalable accounting reconciliation system ?
The right time to implement a scalable reconciliation system is now.
As an Accounting Manager or CFO, we often suggest to scale-ups and enterprises to integrate a flexible and scalable accounting system as early as possible.
This allows the accounting and management team to take full advantage of their workforce and support the company in the face of a sudden growth in the volume of accounting transactions in the future.
What are the benefits of evolving the accounting system ?
In this paragraph, we have gathered 3 significant advantages that you can have by switching from a traditional configuration to a modern and flexible reconciliation system.
“Today we are at 19 billion in transaction volume since the beginning of Mangopay and before it was really Excel which I think is a tool used by many Startups, but now we have more than 200 employees, so we can no longer operate like this and we need automation and that’s what XREC offers.” – Florian RIBAILLIER, Head of Accounting and Financial Control at Mangopay.
Speed up the entire accounting and internal control process
A “scalable” reconciliation system means that the system design can handle and reconcile additional data volume without impacting the efficiency and quality of your processes.
The scalable accounting system digitizes and automates the accounting process from end to end, allowing accountants and financial controllers to accelerate the entire reconciliation operation and support business growth.
When expanding into a new territory, the company often encounters a sudden increase or decrease in the volume of transactions to be performed. As a result, the accounting team can trigger profit leaks if the reconciliation system is not flexible enough to adapt to a rapidly changing environment.
Improving the quality of accounting data
Is your accounting system running 24 hours a day? However, the result is always below your expectations? Or are you still faced with a high volume of inaccurate and incomplete data? These mentioned points can lead the company to a dangerous financial situation.
Implementing a scalable reconciliation system can first increase the processing speed of a high volume of data, which is often encountered when expanding the business globally. In addition, most reconciliation systems are equipped with robust AI models or complex algorithms that can improve data quality. Repetitive tasks are eliminated and data quality is guaranteed, the accounting team can focus their time on the highest value-added mission.
Executives can make informed decisions with accurate and up-to-date data without delay, which can be a game changer for highly competitive industries and sectors.
Minimizing operational risk when expanding your business
A scalable reconciliation system should be flexible enough to evolve whenever your business needs it and deploy wherever your business goes. Moreover, it helps it minimize operational risk during business expansion and outsourcing and ensure security throughout the process, which is extremely important for business management.
Moreover, the scalable reconciliation system can seamlessly integrate with most enterprise resource planning systems and ensure data synchronization between systems. As a result, different business units can share internal data securely without boundaries.
However, to get this benefit, the accounting department and IT professionals must carefully check whether the reconciliation systems and its data center are fully compliant with industry standards like ISO 27001
How to upgrade your accounting system ?
Here are 3 common methods used by most businesses to upgrade your accounting system:
Internal IT
For various reasons, many companies prefer to build their own system, although the disadvantages outweigh the advantages in most decisions.
Building your own system can ensure that the system aligns with the company’s goals and preferences. Internal IT can have complete control over the system without relying on other third parties.
However, building your own system could potentially take considerable time for internal IT to develop. Additionally, the issue of completeness of the system and quality of the results must be eliminated if the organization is looking for a better reconciliation process rather than a problem-making machine.
Accounting firm or consulting firm
When talking about reconciliation system transformation, it is hard to leave out accounting firms or consulting firms.
Many executives rely on the expertise of accounting and consulting firms because of their industry reputation. In addition, these companies offer a more comprehensive set of systems for companies facing scaling opportunities or organizational changes.
With this method, you can simply imagine that you are outsourcing your accounting system and management to a third party. Then, based on your business needs and budget, the company’s consultants will select the appropriate solutions based on your business needs and financing to create the system that can manage your daily operations. In most cases, they can guarantee you a satisfactory result.
However, budget can be a major concern for this type of project and deployment. Most accounting firms or consulting firms have diverse and complex pricing structures. Additionally, the lack of transparency and real-time visibility throughout the process could potentially lead to a dangerous situation for the accounting team to manage.
Accounting software or software system provider
Organizations can also consider the proposal of the accounting system or reconciliation software providers.
Since they have expertise in both accounting management and technical solution development, they can provide informed recommendations with executable plans.
The software provider can provide greater value than the previous two methods by offering an all-in-one compatible and operational solution that can fill in what is missing in the system in a very short time.
Another advantage of this approach will be the high flexibility. For example, reconciliation software providers, such as CALIXYS, could provide the company with greater flexibility to adjust the budget and data volume.
CALIXYS Scale-Up Model - Take your accounting system to the next level
Leveraging over 20 years of experience and expertise, CALIXYS is proud to demonstrably help companies scale their accounting system worldwide with a deep scaling model. Our scale-up model fits all ERPs in large enterprises and SME across different industries.
Companies can easily integrate and deploy their preferred applications or recommended systems worldwide with our scaling model. As a result, this could save considerable time in business operations and minimize risks and discrepancies after updating bank statements or your entries. In addition, for a clearer view of the company’s financial health, our solution provides dashboards to better analyze financial processes.
CALIXYS’ team of experts will provide personalized support and the necessary training to its clients throughout the transformation journey and financial management of the company.
It's time to simplify and evolve your accounting reconciliation processes
To conclude the selection and implementation of a good accounting reconciliation system that will provide the desired result for better financial control requires detailed business knowledge and information technology expertise. Transformation projects can start with the choice of an accounting reconciliation tool with a flexible and scalable model.
