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Bank Rec Automation – what you need to know

What is Bank Reconciliation?

A bank reconciliation (bank rec) is where a company completes a comparison of the cash balances on their general ledger (GL) against their current bank statement information. Any differences in amounts need to be accounted for, and when the two sides are evenly matched the accounts are said to have been ‘reconciled’. This can be a very demanding process for companies, especially when you allow for the level of data that is required to complete a successful bank rec.

Bank Reconciliation Issues

There are a lot of issues that can hinder a bank reconciliation’s integrity. Some of them include:

  • Multiple data downloads from multiple data sources, for example: Credit Card Sales, Online sales, Cash Payments, Location-based cash collection. Multiple banks and bank files such as bank statements, lockbox’s and remote deposits.
  • The use of Excel which is open to manipulation, file corruption and lacks security.
  • The frequency of bank reconciliations and bank lodgements.
  • The timing differences inherent in the receipt or payment of checks.
  • Data summarization with payments and receipts.
  • Different references on bank and GL sides makes high volume reconciliations problematic.
  • Currency differentials requiring booking of gains/losses of exchange.
  • Regular banking only transactions that need coding such as sweeps, interest and charges.
  • Unpresented cheques and lodgements require unreconciled items to be rolled-over at a period end into future reconciliations.
  • Bank reconciliations might need to be performed on a daily, weekly, or monthly basis.
  • Communication of bank reconciliation issues via follow-ups, notes and email are a constant challenge as you look after the most important asset in your company.

Recent Bank Rec Software Enhancements

Cashbook have been involved in multiple bank rec projects around the world for customers. We integrate with numerous ERPs and encounter new bank rec procedures in different industries. Recent bank rec projects have been in banking, education, healthcare and consulting. All of these projects have their own unique bank rec issues that customers want Cashbook to automate. Cashbook developed solutions for these specific issues and added them to our bank reconciliation automation software as enhancements. These new enhancements can be viewed below.

  1. Many to One – this allows for one large lodgement amount on your bank statement to match with multiple smaller amounts on your ledger.
  2. Non-standard References – matching between the bank and ledger can take place if reference numbers are not identical. E.g. item ‘000123’ on the bank side can now match to item ‘123’ on the ledger.
  3. Aliases – this allows for items on the bank side with no numerical/alphabetical relationships to be matched to specific items on the ledger.
  4. Group Unreconciled Items – items carried forward to the next reconciliation can be categorized. This will detail the exact number of unreconciled items in that group – e.g. 500 x checks, 100 x credit card payments.
  5. Report of Unreconciled Partial Matches – this generates a report of items that may have matched in terms of relationship but not in terms of monetary amount.
  6. Field Expansion – It’s now possible to expand specific fields such as ‘payment types’, ‘customer/vendor’, ‘names/numbers’. This allows drill-down capacity to investigate items further.
  7. Notes and Emails – notes that have been left on specific items are flagged up for other users to view. Emails can be sent directly from Cashbook to other users to query certain items.
  8. Filters – are now available on all fields in the bank reconciliation software.

The Key Benefits of Bank Rec automation.

  • 95% automation level of bank reconciliations.
  • 50% reduction in the resources required for bank reconciliations.
  • Improved Treasury visibility on your business cash flows.
  • Increased financial control by completing reconciliations daily or weekly rather than monthly.

Contact Us

If you would like to discuss how Cashbook can automate the Bank Reconciliation Process for your company, you can get in touch with our team. You can call us on +353 61 338 400 (international) or 630-352-2228 (North America). Alternatively, you can email info@cashbook.com to get more information. We are looking forward to showing you how Cashbook can help your company realize the benefits of bank reconciliation automation.


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