Reconciliation is a crucial part of any business as, without proper accounting reconciliation, a company cannot get an accurate idea of its business finances.
Manual reconciliation is tedious and affects the productivity of the employees. It also causes a threat to the business’s health and efficiency as the data are not real-time and inaccurate.
Manual reconciliation is also time-consuming and prone to errors. Under manual reconciliation, it becomes difficult to detect any fraudulent activities and transactions, if there are any in the books of accounts.
Automatic reconciliation can solve this problem for every business and has numerous benefits. Also, it is the need of the hour for those who still rely on manual accounting and reconciliation.
What is Accounting Reconciliation?
Accounting reconciliation process in which we compare the company’s books of accounts with its bank records. In simple words, it is to compare cash records with bank records.
Accounting reconciliation example: A company raises 100 invoices monthly and collects 50 invoices in full and 25 invoices partially. Out of the paid invoices, some were collected online and some offline.
Under manual processes, it becomes difficult to reconcile and update the total/partial/unpaid collections against each transaction and the payment methods under which they come in. The process becomes cumbersome and increases the chances of errors.
In this type of scenario, the process of automatic reconciliation comes into play, which will help companies automatically reconcile the amount in both cash and bank records and will give accurate balances in real-time.
Difference between Manual and Automatic Reconciliation
If a business is managing its accounting reconciliation in excel and doing manual reconciliation, it cannot cut down its cost and errors at the same level as automatic reconciliation. Also, the data can be affected by manual or data entry errors.
A company can yield the best benefits by automating its accounting and bank reconciliation.
How Does Automatic Accounting Reconciliation Work?
A company can get the best benefits of accounting reconciliation if it automates its accounting ERP such as QuickBooks, Zoho Books, SAP, Oracle, etc. Once the accounting process is automated, reconciliation becomes smooth.
With accounting reconciliation software, businesses can match their accounting records with bank records with better efficiency.
How can Hylobiz help in Achieving Automatic Reconciliation?
Hylobiz Platform helps you reconcile accounts payable and receivable by integrating your existing ERP Without any hassle.
Automating both accounting and reconciliation makes sense for a company. Hylobiz understands the business requirements very well and allows you to integrate your existing ERP. Hylobiz also supports automatic reconciliation on its platform. The process is user-friendly and gives you real-time access to your business finances.
Top Reasons to Automate Accounting Reconciliation in a Business:
The most visible benefit of automating accounting and reconciliation is time saved, as it takes a lot of time for accountants to manage bookkeeping and reconciliation. With automatic reconciliation, businesses and employees can devote their focus to other key areas.
Example – An accountant tallies the book records with the bank statements on a daily, weekly, and monthly basis, which kills a lot of time for accountants. But with the help of reconciliation software, it is done accurately on a real-time basis without any hassle.
In return, it saves employees time and boosts efficiency amongst them.
With manual work, there are more chances of error in the books of accounts. Due to this, all the balances will not tally and it becomes difficult to spot those errors.
But with automated reconciliation software, errors can be detected and rectified on a real-time basis, which makes your accounting Error-Free and gives you real-time control of your business cash flows.
Boost confidence in your accounts
By using automated accounting reconciliation, and payment collection tools, businesses can enhance their stakeholder’s trust in their books of account. As it will make the company accounts more accurate, consistent, and error-free. Also, a business following automation gets more recognition than a manual one.
Easy detection of frauds
Best account reconciliation software keeps a check on fraud in organizations.
The software can detect any fraud related to accounting, payments, or invoices, which will fetch any irregularities in the books. Also, which can be reported and investigated.
Example – In the manual process, it is tough to find any cash defalcation done whereas in automated accounting it automatically gets detected in the system by matching the entries in the books.
Employees are more efficient working in an automated environment compared to manual accounting, as it does not become tedious and boring for them to do accounting entries, and then prepare Ledger, trial balance, and balance sheets.
In automated accounting, once a transaction is done, the accounting software will automatically provide the effect in the journal, ledger, and balance sheet. Also, payment reconciliation happens automatically, which improves employee productivity and well-being.
Safe and secure file storage
In manual bookkeeping, it is not easy to keep records of every year, there might be storage issues. Also, if stored, there is a chance of losing the records by theft or fire.
With ERP and reconciliation software, all the data are stored on the cloud and can be accessed 24*7 by anyone in the company. It is both Safe and Secure.
Example – If a company’s books were destroyed in a fire and cannot be retrieved in manual reconciliation but it is safe on the cloud with automation.
Other Key Reasons to adopt automatic reconciliation are:
In Platforms, Like Hylobiz you can seamlessly integrate your ERP and bank account reconciliation software. You get real-time access to your business’s financial health, cash flows, insights on expenses, and invoice status as well.
With automatic reconciliation, businesses gain better cash flow visibility and enjoy more transparency. It also helps in easy audit trials and write-offs.
Also, automating accounting reconciliation is a win-win situation for a company and its employee.
Hylobiz is a B2B Fintech platform solving invoicing, collections, payouts, reminders, and reconciliation with its easy-to-use and advanced technology solutions.
You can create an invoice with free professional accounting reconciliation templates, attach payment links to them and share them instantly with your customers through various digital channels, and get paid faster with multiple payment modes.
Get complete control of your business with our real-time dashboard and improve your business decision-making with automated smart reports.
Also, connect your existing bank account on Hylobiz and be in sync with your bank balances, statements, and transactions in one place and enjoy an improved invoice collection and payout settlement experience.
We are a highly secured platform with ISO certification and bank-grade security. We ensure the safety of your data by applying multiple encryptions and two-factor authentication.
Experience automatic reconciliation with Hylobiz.
Book a demo: https://hylo.biz/book-demo/
Suggested read: https://hylo.biz/how-connected-erp-and-connected-banking-can-improve-sme-payments-and-collections/
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