automated bank reconciliation
Accounting Reconciliation

Simplifying Financial Processes with Automated Bank Reconciliations

Oct 21, 2024 Stefan van Duyvendijk

In business, accurate financial data isn’t just nice to have—it’s imperative. But if you’ve ever manually balanced a bank statement, you know how tedious and monotonous it can be. With lines upon lines of figures and the potential for human error looming overhead, manual bank reconciliation can quickly become a massive headache. You may find yourself wondering, “Isn’t there a better way?”

There sure is: Automated bank reconciliation. Automating your reconciliations both limits the possibility of errors and significantly cuts the time and effort needed. For accounting professionals, implementing a solid automated bank reconciliation process can change the way they approach financial operations within their business. 

Automation sounds like a great solution, but how do you get started?

Key Steps in Implementing Automated Bank Reconciliation

Step 1: Assess and Evaluate Your Current System

Do a full audit of your current reconciliation processes and find the problem spots. What are the pain points for you and your team? Maybe manual data entry consumes too much time. Perhaps your team finds discrepancies often—but there’s no efficient way to track the findings. By laying out these issues and recognizing current shortcomings, you can find a tailored solution. If your current software isn’t getting the job done, it may be time to look for better options.  

Step 2: Choose the Right Software

Not all accounting reconciliation software is created equal. Finding the perfect match for your company is critical. Search for software that will integrate seamlessly with your existing systems, support multiple file formats, and provide robust security features (like FloQast). 

Once you’ve chosen the right software, you’re ready to migrate your data and set up your integrations. This includes tidying up your existing data to ensure only relevant, accurate information is moved into the new systems. Establishing a clear-cut migration strategy will help. Define the scope, estimate the timeline, and assign roles and responsibilities as necessary. 

Step 3: Make Your New System Work for Your Business

Customizing the new system to mirror your existing processes (and connecting them with the apps you already use) will make your transition that much smoother. From developing specific rules for your transactions to creating templates for common reconciliation tasks, you’ll be able to streamline your workflows by putting in a little extra work at the beginning. Plus, the goal is to ensure the software works with you, rather than forcing you and your team to change how you work.

Automation should simplify your workflows, not complicate them. Make sure your team has full training to use the automated software to the best of their ability. From helping develop new workflows, to feeling empowered to troubleshoot small problems independently, the more trained your team is, the better the outcome will be. 

Step 4: Monitor and Evolve

Once you implement the automated bank reconciliation software, regularly check the accuracy and efficiency of the reconciliations. If you spot any issues, reaching out to your support team can make a huge difference. Plus, monitoring the progress of your new procedures can help you gain insights to further optimize your reconciliations. 

As you grow comfortable with your software, make it a practice to train and inform your team regularly. Technology moves fast—but you can move just as quickly with the right strategies in place. A proactive approach will ensure your business continues to benefit from everything your software offers. 

Best Practices for Automating Bank Reconciliation

Maintaining best practices will keep your business running smoothly and your team functioning properly. We recommend the following:

  1. Establish a risk-based policy: Prioritize accounts based on risk. You can focus on these high-risk accounts that may be more likely to have errors.
  2. Standardize your reconciliation process: Implementing a consistent process can help reduce errors and improve efficiency, even when most of the tedious work is automated. This includes using templates (like this bank reconciliation Excel template) to get a holistic view of your data and accounts.
  3. Leverage financial automation: Implementing automation software is one thing, but using it effectively is another. Show your team how to use your software to streamline data integration, transaction matching, and discrepancy identification. This will free up time for your team to focus on more strategic tasks.
  4. Monitor key performance indicators (KPIs): Track KPIs like reconciliation completion times and error rates to assess and improve your team’s processes.

These practices can help financial teams enhance reconciliation processes, reduce errors, and improve the company’s financial management efficiency. 

Real-life Examples of Successful Automated Bank Reconciliation

Take Instacart, for example. Instacart is the leading grocery technology company in North America, partnering with grocers and retailers to transform the way people shop. They facilitate online shopping, delivery, and pickup services from more than 75,000 stores across the continent. After moving to an automated reconciliation with FloQast, they’ve seen huge success. Their close process tightened, and more employees can now work remotely in different time zones across the continent. 

Or, look at GetYourGuide, the world’s leading platform to discover and book travel experiences. They used to struggle through their month-end close with disjointed spreadsheets, checklists, and manual reconciliations—until they moved to FloQast. Now, they can reconcile 600 accounts and close in just seven days. Previously, these tasks took closer to 20 days to complete. 

An automated bank reconciliation solution can help you and your team save time, make better business decisions, and look to the future of the company with reliable data on your side. 

Benefits of Automating Bank Reconciliation

Automating your bank reconciliation comes down to three primary benefits:

  1. Reduction in human error: Bank reconciliations are tedious and repetitive. There are often many transactions to sort through and match. Automation can find the right transactions and flag any that need a deeper dive or more context to resolve. 
  2. Time savings: Automation drastically reduces the time spent on bank reconciliation and frees valuable resources for more strategic tasks. This not only enhances productivity, but also allows teams to focus on work that really matters—and can drive business growth. 
  3. Enhanced financial visibility: With real-time data and reports, organizations gain a full view of their financial health. This transparency leads to better financial planning and forecasting, allowing businesses to make informed decisions quickly. 

At the end of the day, automating your bank reconciliations alleviates a headache for your employees and allows your business to move toward the future. 

Why Choose FloQast to Automate Bank Reconciliation

FloQast is the leading Accounting Transformation Platform for automating bank reconciliations. FloQast integrates seamlessly with existing systems and applications, making it easier for your team to innovate without disrupting the way you work. Customize your workflows and tailor the reconciliation process to fit your unique needs. Plus, with comprehensive support and training, your team can reach its full potential in weeks, rather than months. 

In conclusion, automating bank reconciliation is, at its core, a strategic move to improve efficiency, accuracy, and business growth. By streamlining processes, reducing errors, and enhancing financial visibility, automation changes the game when it comes to financial management. Exploring solutions like FloQast can help your organization drive operational excellence and gain a competitive advantage in your industry.