Balance sheet account reconciliation is an important but often very time consuming hassle. The aim is to ensure accurate recordings of transactions and thereby accurate reporting. As this exercise is one of the core activities in the month-end close, internal as well as external auditors often require that the process is fully documented and that evidence is accessible to the audit team.
Here are four tips to optimize your company’s balance sheet account reconciliation.
Choose a solid solution
Excel is widely used for balance sheet account reconciliation, though errors often occur. Spreadsheets are as fragile as they are flexible and having many employees involved in a process supported by spreadsheets does not reduce risks or errors. Using a solution designed for the purpose reduces errors and will lead to optimization of balance sheet account reconciliation. There are several suppliers on the market and solutions can often be tailored to the exact needs of your company.
Utilize the cloud
In many companies, a large number of employees are often involved in the process of balance sheet reconciliation. It is not unusual that there exist just as many places and ways of storing documentation as there are employees involved in the process. Clearly this poses a problem when internal and external auditors need access to relevant documentation, or when work needs to be reviewed. Storing documentation in a central place where access can be granted not only within but also from outside the organization, saves time and energy, and here the cloud may be your friend.
Automate your workflow
When choosing a solution, remember to evaluate how the solution may assist in automating workflows. Automating workflow is key to time optimization, and can reduce the amount of human errors as well. Furthermore, a high number of tasks and people can be involved in the process, and a good automated workflow will help in getting things done in the correct order at the right time.
It is not uncommon that all employees involved in the process of balance sheet account reconciliation has their own preferred way of performing and documenting their work. However, if you want to optimize, standardization is the answer. Standardization optimizes the process, while also saving time and increasing accuracy. A side effect of the standardization is that it will be timesaving for both internal and external auditors, when reviewing the work. Furthermore, standardizing makes you less vulnerable of employees leaving the team or company, and will help ease the onboarding of new employees.
Do you want to know how Impero streamlines month-end close and balance sheet reconciliation – book a demo today. You can also read about how Falck manages their balance sheet account reconciliation.