January 5, 2022Invoicing
Very few accountants will rank the account reconciliation process as one of their top favourite tasks to do.
Throw in human error and the complexity of spreadsheets required to pull this off, and it becomes more and more frustrating.
The good news is, it doesn’t have to be that way. Try these five methods for reducing the process to minutes or even one second.
1. Update as You Go Along
Don’t wait until the day you need to balance the accounts to start doing data entry as well.
If you get the team into the habit of entering all necessary information as the transactions occur, you can drastically reduce how much time you spend chipping away at this.
Taking this approach also reduces the likelihood of forgetting areas that should be reconciled, such as cash payments for invoices.
2. Gather All the Account Reconciliation Process Documents
As most seasoned accountants know, balanced accounts do not always mean accurate accounts.
Sometimes debit and credit errors line up perfectly so as to appear balanced when there are actually missing transactions. When you have all the information you need on hand, it’s much easier to complete checks and balances
3. Know What Errors To Look For
Start by taking notes of the errors that usually throw off the accounts and always look for those first. Use these to get you started:
- Can you find a specific transaction that matches the discrepancy amount? If this is the only error, then you’ve found the problem.
- Did you make any entries twice? These are easy to spot as they are usually right behind each other.
- Did you forget to include an entry? If this is the only error, the accounts will be off by the total of this entry.
- Did you accidentally enter digits in the wrong order? For example, you might have meant to write 131 but wrote 313 instead.
- Did you make a mistake with the placement of a period or comma? This changes the entire numerical value.
4. Document the Account Reconciliation Process
Even seasoned accountants can lose track of where they left off when they stop mid-process to attend meetings, respond to emails, or take a lunch break.
Documenting the process makes it easier to identify the last step and move on to the next one.
It also makes it easy to train other persons on the process, which ensures continuity.
5. Harness the Power of Technology
In the past few years, several accounting tech companies put in the hard work necessary to create one-click reconciliation.
To accomplish this, companies must enter all the necessary account information so that the software has access to all transactions. It then completes an automatic reconciliation in a second with a quick click.
This can return an entire workday to the accounting team.
At PencilPay, we make it easy to complete the account reconciliation process with one quick tap of the mouse. Pick your plan and try it free for 30 days. Your accountants will be glad you did.