A Guide to The 3 “A”s Of Account Reconciliation: Automated, Accurate, Actionable

One of the most essential tasks in the accounting world is account reconciliation. However, as important as it is, it can be tedious, time-consuming, and confusing. Even using spreadsheets to reconcile accounts can lead to problems with security, auditability, and human error. Recent studies have shown that 90% of organizations have said that they have experienced challenges related to the financial close process.

A recent survey conducted by Gartner indicates that an overwhelming 90% of organizations encounter significant challenges during the financial close process. These challenges encompass a wide range of areas, including data accuracy, time-consuming manual tasks, lack of visibility, and complexities associated with compliance requirements. The most common issues include a a high risk of manual errors, and a need for more support to achieve their objectives. This is where technology simplifies and modernizes the account reconciliation process. However, more than simply implementing technology is needed to solve these problems.

Organizations must also have the right processes to maximize these solutions. That’s where the three “A” s come into play: automated, accurate, and actionable. By striving for these three goals, organizations can ensure that their account reconciliations are streamlined, efficient, and effective. In this guide, we’ll explore these three “A”s in-depth and provide strategies for organizations to achieve them in their account reconciliation process.

The 3 A’s of Account Reconciliation:

1. Automated

Manual processes can be a significant hindrance to efficient and accurate account reconciliations. Using spreadsheets for account reconciliations requires users to download or export trial balances from the general ledger and manually input any new accounts. Additionally, any last-minute postings require restarting the entire process. However, with Oracle Cloud EPM Account Reconciliation’s direct integration into general ledgers, new accounts and data changes are automatically fed into the tool, eliminating manual processes and saving valuable time.

Moreover, account reconciliation tools should also eliminate the need to reconcile data by a marginal amount. Spending time reconciling accounts that are only off by a few dollars is not an efficient use of time. Oracle’s solution allows users to set rules that automatically confirm data for specific accounts or when the difference between the two sources is too small to impact the business. These rules can be copied for future periods, and notifications can be sent to inform appropriate parties of the thresholds used. The result is a more efficient, accurate, and automated account reconciliation process.

2. Accurate

Inaccurate account reconciliations can lead to errors, missed opportunities, and fraud. As each account is reviewed during the reconciliation process, it is crucial to know its purpose and the source to tie it out against to ensure accurate reconciliations. Accurate reconciliations can also help detect fraud in cash accounts, where even minor discrepancies can indicate fraudulent activities.

One of the most effective ways to achieve accuracy in account reconciliations is by matching each transaction from the source to the general ledger. However, this can be challenging and time-consuming for organizations with a high volume of transactions. Fortunately, modern technology offers tools that can automate this process, combing through all source and target transactions, matching consistent data, and pinpointing transactions that don’t match. This can save hours of work and ensure more accurate reconciliations. By leveraging these tools, organizations can achieve greater accuracy in their account reconciliations and identify discrepancies quickly and efficiently.

3. Actionable

One of the biggest challenges with account reconciliations in spreadsheets is the need for standardized processes. Users may run the process differently, resulting in inconsistent and unreliable results. However, Oracle Cloud EPM offers a solution to this issue by ensuring standardized procedures are defined for each account or group of accounts. These developments in easier reconciliation processes and progress can be tracked to monitor the overall close.

Once a company-wide process is defined, organizations can simplify other actions, such as identifying accounts with the highest risk of error or accounts that must follow specific statutory requirements. With Oracle Account Reconciliation, insights can be provided to monitor these actions, identify bottlenecks, and speed up the overall process. This allows organizations to take more actionable steps to improve their account reconciliation process, increasing efficiency and accuracy. By leveraging technology and standardized methods, organizations can ensure more reliable results and make the reconciliation process easier for everyone involved.

Maximize The Value of Your Account Reconciliation Processes:

Account reconciliation is a necessary but often time-consuming process for businesses. Utilizing spreadsheets can add more problems and risks, but technology offers a solution to simplify and modernize the process. Organizations can streamline their reconciliation processes and drive better results by striving for the three “A”s of account reconciliation – automated, accurate, and actionable.

The right technology, such as Oracle Cloud EPM Account Reconciliation (ARCS),  can speed up reconciliations while ensuring consistency and accuracy. With direct integration into general ledgers, automatic rule setting, and insights to monitor progress, organizations can improve efficiency and identify the accounts that need action.

Our cutting-edge whitepaper delves into the intricacies of best setup practices for Oracle ARCS, offering in-depth guidance for organizations seeking to optimize their reconciliation processes. Discover the transformative benefits that await, as we unravel the key drivers behind these practices. Download the whitepaper “Say Goodbye to Tedious Account Reconciliations: How EPM Cloud ARCS Makes it Easy”

With our expertise in Oracle EPM, Datavail can help businesses maximize the ROI of their technology investments and plan their migration to the cloud. With the right technology and support, companies can achieve a more efficient and accurate account reconciliation, freeing up time and resources for other critical business functions.