What far too many CFO’s don’t understand – as pointed out by this research from PWC – are the implications of uninvestigated non-matching transactions.

Ignoring non-matching transactions affects the month end close’s compliance with laws, normative bodies and practice standards, and should be of

transaction matching, month end, month end close, concern to any manager wanting it to ensure internal compliance.

  • Here is why and how you can rule it out.

With hordes of transactions to marry up, a heap of non-matching items occur in various areas. From debit-versus-credit-matching accounts to bank statements, general ledger and sub system ledgers, or when matching off inter-company accounts.

Unfortunately, as some of us know and research as above confirms, these non-matching items may be considered reconciled if they are quantified but not investigated. Or considered open and rolled forward to the next period without investigation proofing this is a correct action. Next period these transactions with new “open” transactions may again be rolled forwarded increasing the burden. Or moved to a check-this-later-account, where it all piles up and is practically impossible to solve, and have to be written off as misstatements anyhow. 

The question is: Why aren’t these transactions properly investigated?

Excel, the Swiss Army Knife on any Finance Department, is an important reason. The nature of the knife is its broad versatility – it definitely is of good help for so many unplanned and none repetitive tasks. But for repetitive tasks as Transaction Matching, it is just a little better than doing it manually. Here is why…

With Excel you will still spend a lot of time on importing, rearranging, and formatting. Matching adjacent transactions in Excel is a little less time consuming then with the paper and pen on the print outs. So precious time is still spent on what actually should match instead of it being automated. Left behind are the not so easily matched transactions. It could be that they just are not adjacent, or may need to be matched versus data in two columns from the other source. Or perhaps that it is both: two or three columns on two transactions, that has to match one or even several transactions from the other source.

This can be solved in Excel by searching for what seems to be unique, as a reference number or name. But manoeuvring in Excel is not straight forward for repetitious tasks. The reference has to be identified in one of the sources, copied and then pasted into the search dialogue box in Excel, and then Excel wanders off and may find several matches. You may have to leave the dialogue box and mark and or copy the found information and go back to where you first picked it up and compare them. If it wasn’t a match, you do the same again. Then find a new reference, copy it, paste it into the search dialogue box. With hordes of data and non-matches here and there in it, it is tedious. It is error prone too (you may accidently leave out a digit when you copy it, or erase one by accident). If you need to search for a match in two of the columns and from two transactions, it becomes a practical impossibility in Excel. It was not built for these repetitive tasks.

Lastly, it may turn out that a previous match was wrong, since a better match has been found. This demands that the previous match has to be rolled back. But which was its corresponding transactions that has to be rolled back too? This can be a nightmare since finding it amongst the hordes of matches could mean that is nearly as much work as starting all over again.

Doing Transaction Matching of hordes of transactions in Excel, may seem a good idea, but it isn’t.

What actually happens is you end up with a non-resolvable mix of transactions that actually could have matched if you had the tools for searching over several columns and several transactions which are presented as unmatched. These are there together with what probably are data entry errors, and what probably are truly open transactions. To investigate this mix, becomes practically impossible, and hence it can be deemed to be reconciled without investigation or rolled forward, or ends up in a control account where it has to be written off anyhow.

The issue here is that an all purpose tool for none repetitive tasks. For tasks with hordes of transaction which occure regularly on a Finance Department, it isn’t that good a solution. 

Investigating and creating exceptions with specialist software

Specialist software, such as transaction matching software Adra Match ACCOUNTS, could be said to do a series of things.

  • Firstly it automates the bulk of your transaction matching, leaving only the most complex non-matching entries to investigate.
  • Secondly it also provides the tools to quickly and effectively investigate any unmatched transactions.
  • Thirdly, if you need to share information with a college, it is easily done to copy relevant information and share it (instead of several copying and pasting where it anyhow is difficult for your college to understand).
  • Fourthly, as you will find the previous faulty match, it is just so easy to roll it back – the system keeps a perfect audit trail of whom did exactly what to which transaction.
  • Fifthly, to create exceptions, as a journal entry, or the list of open items for the Month End Close, is just a click away.

This ultimately ensures  the perfect and efficient Month-End Close, and should be of concern to any manager wanting it to ensure compliance.

Discover more about transaction matching software Adra Match ACCOUNTS and how it could transform your month-end close process. 

Connect with Adra Match on Google+

Read the previous blogs in this ‘transaction matching obstacles’ series:

  1. Monthly close compliance demands CFOs to fight transaction matching obstacles
  2. How to match transactions from two sources – benefits & shortcomings of Excel