Posted by Robert Half Finance & Accounting on Monday, August 31, 2015 - 11:00 | Follow me
Account reconciliation is one of the most time-consuming tasks in any finance and accounting department. But with automation, the situation is getting better.
What’s changed? The number of U.S. teams reconciling accounts manually has dropped from 65 percent in 2013 to 59 percent in 2014 — and now, to 54 percent in 2015, according to Robert Half's 2015 Benchmarking the Accounting and Finance Function report.
Of course, the firms that have automated their reconciliation process are still in the minority. Financial professionals sticking to the tried-and-tested methods say their budgets don't stretch to buying new systems. They’re uncertain about whether existing software can meet their current needs. Their CFOs worry that training requirements will actually increase the amount of time it takes to reconcile over the first year.
The concerns are valid. Each company has different needs, so every CFO must consider whether the benefits of automation outweigh the costs.
If you’re thinking of moving toward full or partial automation of the reconciliation process, here are three basic steps to follow.
1. Assess your current needs and capabilities.
Start by building a complete user story for the finance team of how reconciliation is handled, so you can identify where automation may help. You may immediately see parts of your workflow that could be made more efficient, such as processes with multiple hand-offs. You may also decide that certain operations, such as the financial close, are too complex to automate, and that a human eye is always needed there. But analysis can often identify ways of streamlining those operations.
2. Evaluate the available software options.
There is no one-size-fits-all business accounting software. Enterprise resource planning (ERP) software was once the tool of choice in finance, but usage of ERP among finance teams dropped suddenly last year from 78 percent to 53 percent, according to the Benchmarking report. Today, you’ll discover an even greater variety of financial software tools to choose from, and you'll need to consider some emerging issues, such as whether to use cloud-based solutions.
3. Support staff during the rollout of new systems.
Training is a major concern for many CFOs when considering automation. Your skilled staff may know already how to work the manual process. But what will happen when they switch to a new process? For example, if users don’t feel confident with a new system, they may not use its full capabilities. To address these concerns, make sure that all team members have adequate training and support, so they can get familiar with the new system. And consider a phased rollout, if possible. It allows a selected segment of staff to learn the new system first, then use their experience to help others.
It seems inevitable that reconciliation work will eventually all be automated. Companies that still reconcile manually need to start planning for change if they're going to stay competitive.
Does your company have an automated or manual reconciliation process? Share your experience below.