Date: 06.12.23 | Author: P.J. Yates | Read Time: 3-Minutes

As a title agent, reconciling accounts is a crucial part of the job. Failure to reconcile accounts can result in many agonizing issues including:

  • Disconnected and inaccurate data sources
  • Incomplete data
  • Missing data
  • Poor decision-making
  • Fraud

Despite being a routine task, managing reconciliation can be challenging, especially as businesses grow larger. It quickly becomes a growing source of stress for many professionals and teams.

Manual reconciliations are very time-consuming, often taking days and requiring significant resources to complete. Thankfully, there are now automated tools available that can efficiently handle large volumes of reconciliations. This allows agents to save time and prioritize more complex tasks.

To better understand why automating reconciliations is important, it’s necessary to recognize the challenges associated with manual reconciliation.

The Problem with Manual Reconciliation

It’s simple –  many people are still reconciling multiple accounts with different numbers of transactions manually. Here are three reasons why that’s a major issue:

1. [Accountants] have limited time to perform high-value tasks

The process of manual reconciliation is quite lengthy, and it becomes even more of a hassle for larger organizations. This leaves accountants with very little time to devote to more important tasks. This issue has been a longstanding problem and has only become worse since COVID-19. Many accountants have been called to serve in strategic advisory roles, making it even more difficult to find time for reconciliation, which is comparatively less valuable.

If you work as a [accountant or controller] in a big organization, you may understand the struggle of having too many responsibilities. The reconciliation process can be overwhelming and it can be challenging to find time to fulfill the advisory role that is now required of you.

I had my first experience observing reconciliations when I worked at a title and mortgage company. To my surprise, I got to see how often mistakes and discrepancies were made each month and how that threw off the books by thousands of dollars. Sorting out the discrepancies was a long, cumbersome process. I remember thinking: What would this process be like at a large organization? While I was so glad that I was in marketing and not a part of the processing team. And to make matters worse, they’re being asked to close the books faster and faster each month.

2. The Pressure to Close Books Faster Increases the Risk of Errors

Reconciling accounts using traditional methods requires adequate time for proper execution without shortcuts. However, time is a scarce resource for both businesses and accountants.

Organizations often prioritize closing their books quickly to plan their next move. But, hurrying the reconciliation process can result in errors and inaccuracies, which can be detrimental to making informed decisions about the future operations of the business. Precise and dependable data is crucial for making strategic decisions. The demand for quicker financial closures can make accountants feel uneasy about their work, despite their critical role in the process.

3. Reconciliations Leave Accountants Stressed and Burnt Out

If you ask any [accountant] who handles month-end close, they will inform you that it is a regular source of stress that affects not only themselves but also their loved ones, colleagues, and even their company’s management.

When I got to experience my first month-end close I could sense the tension in the building. From there on out, I knew when it was month-end close because of the temperament of the management team, loan officers, and processing team. I got to witness the no days off mentality as they missed out on holidays and important life events because of reconciliations/month-end close.

Why It’s Important to Automate Reconciliations

Automating the task of reconciling accounts is a wise choice due to the long and intense hours it requires. Automation not only saves time but also enhances decision-making and reduces errors, making it more advantageous for businesses.

The introduction of automation offers several advantages to businesses, including increased productivity and efficiency, as well as:

  • Financial close process acceleration
  • Accountants have time to focus on high-value work
  • Improved productivity
  • Better work-life balance

Automating manual tasks that can be automated properly is crucial in a fast-paced environment. Reconciliation is an area where automation can free up time for accountants to focus on their advisory roles.

1. Automation Reduces the Risk of Errors and Ensures Accuracy

It is common for humans to make mistakes. Accountants who work long hours to balance accounts may become exhausted and more likely to make errors as a result.

Automation removes the manual steps in the close process and:

  • Assures accurate figures
  • Provides the most up-to-date numbers
  • Reduces common errors

It is common for the trial balance to be updated after closing, so companies and accountants should use the latest numbers when automating the reconciliation process.

2. Enhances Control and Transparency

Having internal controls and transparency is important for every aspect of a business, including the reconciliation process. Automation provides managers and controllers with a clear and comprehensive view of the entire reconciliation process. Furthermore, as the process is clearly outlined and visible from start to finish, automation reduces the risk of financial fraud.

3. Combats Burnout and Stress While Improving Work Satisfaction

As mentioned before, the process of reconciliation can be difficult, exhausting, and involves a lot of repetition.

Automating the reconciliation process helps companies make better decisions and also benefits the accountants who work for them. Overall, it is a great advantage for businesses and can provide your employees with a much-needed golden egg of time and energy savers.

Are you concerned that your employees are burned out and overworked? Schedule a software demo with Team Rynoh and learn how to close your books faster and more accurately with automation.