And God (of accounting) spoke these words: “I am the Lord your God…of accounting, who brought you out of financial trouble, out of the land of decreasing financial returns.”
Unto them he bestowed 5 commandments of balance sheet reconciliation that would forever be the foundation of an efficient and effective accounting team.
Are you guilty of these accounting sins?
Commandment One: Thou shalt never lose control
To steer your business to financial success it is essential that there is someone watching over the month-end close process who has ultimate control. This person may be the CFO, Financial Director or Accounting Manager – whomever takes responsibility for accurate reporting on your balance sheet must retain control of the process.
This is more easily said than done. When staff are using a combination of shared spreadsheets, printed documentation, email, accounting software, and so on, it is impossible to maintain complete oversight and control of the process.
With the right balance sheet reconciliation software, however, this process becomes completely integrated and will provide instant visibility into the planning, progress and status of the reconciliation process to whoever needs it.
Commandment Two: Thou shalt not stray from compliance
There have been a number of financial scandals in the last couple of decades, scandals that have triggered a greater breadth and depth of regulation. It is essential that your finance team stays fully compliant with all of the regulations in operating jurisdictions. For example, the Sarbanes-Oxley Act (SOX) requires finance departments to have stringent internal controls in order to catch any errors or mismatched amounts.
By using a digital balance sheet reconciliation tool that allows you to programme the necessary controls for compliance, you can ‘hardwire’ the processes needed for compliance into the very software you use to reconcile your balance sheet. This means that staff have no option than to follow best practices – keeping fully compliant along the way.
Commandment Three: Though shalt close in a timely manner
The finance team’s ‘Sabbath’ is the day on which you submit your monthly financial report. This should be 1-2 days after the end of the month, however the Adra Match Financial Benchmark Survey found that 50% of finance departments took longer than three days to complete their month-end close.
Balance sheet reconciliation software can relieve the burden of manually checking balance sheet items. By automating the tiresome and lengthy manual work you can concentrate on items which do not add up – the areas of the balance sheet that truly deserve to have time spent investigating. Not only does this result in a quicker close process, but it improves the overall accuracy of your financial reporting.
Commandment Four: Thou shalt not archive in binders
The traditionalists among you may feel more secure having a printed copy of your documentation stored in a binder, but realistically it is far less secure. A flood or fire could see all those records wiped out in an instant, whereas, with digital off-site backups, even if the worst were to happen to your computer system, you would still retain all your documentation.
What’s more, with specialist balance sheet reconciliation software, you can link the digital versions of your documents to each account and balance sheet item. This makes it incredibly easy to find the documentation relevant to each account in case of an audit or queries on the account at a later date.
Commandment Five: Thou shalt be efficient and productive
I think most finance staff would agree that their talents and training is often being wasted on menial administrative tasks. As your organisation grows, the stack of administrative tasks grows ever longer. What’s more, assigning highly-trained finance professionals to carry out such menial tasks means they are more liable to make simple mistakes.
It would be a far better use of time and talent to assign your staff something stimulating and challenging – such as the investigation of an open balance sheet item that just will not match up. Automating much of the tedious manual work opens up the opportunity to spend more time investigating these issues and working on ways to improve controls, efficiency, processes, and so on.
BALANCER, specialist balance sheet reconciliation software from Adra Match, allows you to abide by these holy commandments. A user-friendly dashboard provides an instant overview and allows you to drill-down to the necessary module. Pre-programme processes and controls to stay efficient and compliant ad use the archive to backup digital versions of your documentation.
Give BALANCER a try today with a free demo and begin your journey to balance sheet redemption.