Posted by Robert Half Management Resources on Monday, July 28, 2014 - 00:00 | Follow me
The number of active general ledger accounts in the United States and Canada is growing, but reconciliation practices still remain quite labor-intensive. How efficient are your accounting operations?
Whether it's end-of-year, quarterly or perhaps even monthly, account reconciliation can be one of the most stressful and time-consuming tasks in finance and accounting. While it may be a bit old-fashioned, manual reconciliation remains tried and true. Finding ways to improve processes and efficiency, however, can allow you to reallocate valuable resources to more productive and necessary tasks, resulting in additional benefits for your company.
Benchmarking finance and accounting procedures
To gauge the processes and accounting operations across financial departments, Robert Half worked with Financial Executives Research Foundation (FERF) to produce Benchmarking the Accounting & Finance Function: 2014. The report includes data gathered from 1,600 financial executives in the United States and Canada and is designed to help financial leaders ensure their firms remain competitive across all processes and functions, including accounting operations.
The current state of accounting operations
According to data gathered for the report, the majority of companies surveyed (59 percent) still rely on manual reconciliation of accounts.
What's more, the number of general ledger accounts is growing, with 38 percent of U.S. executives indicating that they have more than 500 active accounts and 9 percent indicating they have more than 3,000. In Canada, 13 percent have more than 3,000 general ledger accounts, while 4 percent have more than 10,000. These numbers, when considered with the continued dominance of manual reconciliation, suggest that the process of managing accounts is requiring additional resources, taking employees and time away from other vital tasks.
In addition, many respondents noted a need to improve efficiency in preparing financial statements for regulatory agencies, which also proves labor- and time-intensive. For today's financial leaders, the challenge is clear: Find a way to speed up these processes while maintaining quality and accuracy.
Ways to streamline
When looking for ways to streamline accounting operations, consider these key questions:
- What nonessential activities can be eliminated? Where are resources being wasted or used inefficiently on tasks that don't add value or provide insight? Reallocate resources to the important matters at hand.
- Can a web- or cloud-based solution help improve efficiency? Third-party software — including ERP systems and cloud-based programs — are gaining in popularity. Cloud-based solutions can often offer better data integration and are more cost-effective than out-of-date in-house systems.
- How can the demands of manual reconciliation be reduced? Carefully review your reconciliation procedures and evaluate whether any steps can be automated to conserve resources. If so, determine a transition plan and carefully begin implementation while ensuring accuracy is maintained. Engaging financial consultants from a specialized staffing firm can help ease your staff’s burden while transitioning to automation. If you’re unable to automate, skilled project professionals can prove valuable when reconciliation demands are high.
Evaluating your processes to improve the efficiency of reconciliation and the preparation of financial statements will ensure your company is poised to adapt to changing regulations and demands down the road.
Download the Benchmarking the Accounting & Finance Function: 2014 report, which now includes video interviews, for additional insights.
NOTE: This blog post was updated August 6.