We all need to safeguard against lost or misallocated funds, and reconciling accounts receivables provides essential financial information for us to do that, yet this is a mundane and time-consuming task. Perhaps it seems an even more tedious due to our age of computers and instant information, but there is no rationalising the task away, your reconciliation must be done one way or another.
Simply data matching your payments with corresponding accounts is tiresome yet relatively straightforward (bar a few expected human errors!) The bit that really turns finance professionals off is the time wasted trying to understand mismatched or unallocated payments.
Consider this; you are matching your payments received with your account receivables and you find a payment from an external account listed in your bank statement but with no account or invoice number, and potentially an overall amount rather than payments for each individual order. As you will know, in these cases you must check with the bank to find out which company the account belongs to, check the outstanding amounts owed by that customer and then try to work out which of their invoices they are clearing. In some cases you will be left wondering if a credit invoice has also been deducted from the total. Add these complications to the mix and you will be left with a highly frustrating job to do.
It is frustration you simply do not need, especially when you are working to a deadline. And, to add insult to injury, if that is the way the customer tends to pay, you will have the same issues and long-winded reconciliation job each and every month!
In this age of computing and automated programmes you would think there’d be a better way… What is really needed is a financial reconciliation tool in which you can link each bank account to a specific customer. That way when the bank statement is imported the tool would automatically list only the invoices of that particular customer on screen and automatically suggest the invoices (both debit and credit invoices) that met that amount. This would allow you to quickly match up the amounts with the accounts and invoices.
But what if a customer had paid the wrong amount? Even if the payment is a single pound short the amounts will automatically be mismatched. So the tool, to be completely useful, would have to recognise this and automatically issue a book order to balance the remaining amount. So, if this tool is already around, shouldn’t you stop manually reconciling your sales ledger immediately and switch to automatic reconciliation? With all these complexities of reconciling accounts receivables it is not surprising that financial directors and CFOs are beginning to realise the advantages of switching to modern automatic account reconciliation software such as Adra Match Receivables. Software such as ours can automatically match accounts to uncover discrepancies, saving a huge amount of time and effort.
Adra Match Receivables (AMR) also includes intelligent advanced logic which allows it to make suggestions for discrepancies. For example, if a repeat payment, an invoice or order number is missing, AMR will be able to suggest the missing invoice or order number based on past transactions. The longer you use AMR, the more it will learn and the quicker the reconciliation process will be.
For companies with a high volume of transactions, automatic account reconciliation software is almost essential. You can reduce reconciliation time from days to just hours, reduce errors associated with manual reconciliation and, with AMR, you can even convert multiple different file formats to one consistent format, making account information consolidation a far easier task.
To discover the full set of benefits behind Adra Match Receivables, visit our product page. Alternatively, gain a hands-on learning experience with one of our free online demos or contact us with any follow-up questions.