Account Reconciliation is very important for CPAs and accounting firms. If they are not handled effectively, they can be time consuming and exhaustive. Below are some of the practices for you to handle account reconciliation in a whole new perspective:
1. Prioritizing the Balance Sheet
Strategically planning your priority is the key approach. This method is also called “risk based prioritizing.” You need to identify the accounts that have high chances of becoming erroneous essentially. This can be done by ranking the risks as high, medium, and low. Ensure that risks that are ranked high should be given more importance. You can also set times for each category. For example, you can set time frames like monthly, bimonthly, quarterly, etc to process the accounts. You need to thoroughly analyze the accounts both qualitatively and quantitatively to categorize each account.
You need to identify one “Best Practice” and ensure that you communicate the same to all the departments of the organization and everyone follows it as told. For instance, a company has to standardize the accounts reconciliation process, policies, templates, etc across the whole organization.
3. Monitoring the process
Every member of a team should stay updated with the process going on. This may not work as desired if the team does not have a leader. When we talk about leading a team, it doesn’t mean that this leader should be from management; any person at a lower grade who has the flair to run the show will work. All he has to do is ensure that all the team members finish the tasks on time, follow up with late or unfinished reconciliations.
4. Utilizing technology effectively
Technology these days is playing a vital role in the reconciliation process. Use the software from companies like Trintech, Hyperion, and BlackLine. These companies have designed software which has made the accounts reconciliation process much easier. Some important features of the software include automated balance interfaces, automated notifications for the users, real-time dashboards, etc.
5. Improvements driven by metrics
The leadership in monitoring the processes can also take care of the performance enhancement and improvement by utilizing the metrics available. There are certain metrics that should be reviewed at regular intervals like a person’s or department’s completeness, material reconciling items, and overdue reconciliations. This can also help enhance the above mentioned standardization process.
Contact @ +1-860-215-4997 to know more about reconciliation and handle any of your accounting activities.