Reconciliation: Almost everyone within an organisation who deals with accounting – from entrepreneurs to financial administrators and accountants – know it well. It is the matching of entries that belong together in a ledger account. It is a simple but extremely necessary process. Online shops, for example, handle dozens of orders a day. These orders all have to be packaged and provided with an invoice. When a customer receives an order, they have two options. Make the payment if the product is good or return the product with all the relevant administration if the product is not satisfactory. In order to keep these records in order it is important to correctly process the entries. To do this, they have to be reconciled.
Is reconciliation suitable work for humans?
Many organisations match these entries manually in specially-made Excel documents or in specialised software. Keeping entries is of immense value to maintaining clear records, as it must be possible to justify any amount in the records. Therefore organisations dedicate a lot of attention to this process. But if you ask me, manual reconciliation is a waste of time. A lot of people spend a great deal of time matching payments to outstanding items. Not to mention the human error that can occur! It is not a process that can be 100% automated, but I am sure that 80% of payments can be matched using reconciliation software.
For instance, I recently visited the Erasmus book store in Amsterdam, where they carry out reconciliation manually. As there was a shortage of staff, the organisation was three months behind with their records. I was sure that implementing reconciliation software like MatchMaker would improve their processes. As expected, the software cleared up months of arrears within two weeks by one FTE.
A match made in heaven
Intelligent software, such as MatchMaker, can set rules to ensure payments received are automatically reconciled and processed in financial records. Not just by invoice number, but also by postcode and customer name. This saves time which staff can then use to focus on customers that need more attention. The other 10% that are not automatically matched due to a difference between the invoice and the actual payment is then matched manually within MatchMaker. An advantage with MatchMaker is that it gives suggestions for potential matches, also saving time. Less time, lower costs, fewer human errors and higher staff productivity. If you ask me, technology and reconciliation are a real match made in heaven.
“Technology and order to cash solutions are a match made in heaven”