With the end of the fiscal year approaching, your enterprise is certainly busy with closing all those year-end accounts. It’s now time to reconcile individual debtor and general ledger accounts and to resolve those open positions.
If not automated, or at least partially, the reconciliation process is a long one, requiring considerable effort and time. Your existing process may involve:
- Gathering, sorting, and evaluating receipts from the various acquirers,
- Assessing open positions from acquirers based on documents and lists,
- Compiling, sorting, and evaluating account receipts,
- Substantiating the various bank accounts using documents and lists.
The Accounting and Audit Challenges
Without a fully automated reconciliation system, the steps above require many hours to process. Often done using Excel, Pivot Tables, and numerous employees. Even with the extensive effort put in, discrepancies still remain. These remaining differences are often simply crossed-off since so many man-hours have already been invested into it. Attempting to reduce the entry to zero would require an enormous amount of further investigation.
Additionally, auditing your accounts necessarily involves the auditor analyzing these differences yet again. Doing the investigation once again results in your enterprise incurring additional costs and could lead to a note referencing the issues in the audit report. These extra costs and the accounting errors could have been avoided by having a better reconciliation system in place.
Let’s take a look at a brief example:
Your auditor is required to prove the open positions (accounts receivables) in your balance sheet since this position is an asset in your books. In the case of a large retailer, these open positions are usually one to two days of revenues (the average delay in settlement). For a retailer making 500 million in revenues, that will be 3,174,603 in open positions (500Mio x 315 shop opening days x 2 days settlement delay). With an average amount of 50 per transaction, the open positions will be represented by 63,492 receipts.
In our case, the auditor must make clear that all receipts exactly match the open amounts. If you have no clear matching process with clear auditing rules, producing the required evidence will be quite difficult.
Given this, your auditor will be very happy to see a system with clear matching rules, daily matching, and a relationship between all receipts and the corresponding settlements in the bank account.
Make Year-End Accounting Easy
With ReconHub, you have the solution you’ve been looking for. Developed by Abrantix to transform your accounting results, the ReconHub software,
- Enables 100% reconciliation of all payment card accounts, and
- Is fully automated.
This means your business gains by:
- Saving in time and revenue,
- Higher quality and transparency in your accounting,
- Lower auditing costs and risk of any reference to issues in the audit report,
- Quick data collection - as the credit card debtor accounts can be populated in minutes with the Open Positions Report from ReconHub.
To learn more about how ReconHub can help you with daily payment card reconciliation contact us.
