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Automated Bank Reconciliation: An Instant Analysis for Your Business

Feb 26, 2020

How healthy is your business? It is important to perform timely measurements of cash flows to assess the health of your business. The appropriate use of current technology allows automation of the bank reconciliation process, which gives real-time read-outs of fiscal status.

Cash flows are the core of a business; therefore, a clear view of income and outflow is critical. Can you afford to hire that employee, invest in that equipment, or sign that service contract? Accurate cash flow data—provided by your bank reconciliations—enhances analysis of these common questions.

Bank Reconciliations Are Important Yet Difficult

Reconciling bank statements can demand an inordinate number of hours. But the usefulness of those statements for making business decisions is driven by the complete, accurate, and timely recording of the organization’s transactions.

Business owners have a lot to think about—marketing, sales, payroll, suppliers, etc. So most of the time, the last place that draws focus is accounting. If bank reconciliation takes valuable time away from running the business, or if it just leads to more confusion despite the hours invested, the natural response is to delay or avoid the task. The lack of or delay in cash insights has the capability of being a significant problem.

The good news is that current technology provides an effective solution that benefits businesses and their owners. Many of today’s high-tech accounting packages sync with financial institutions’ feeds for seamless data integration. When a transaction comes through, the system automatically posts it to the proper account (e.g., utilities, vendors, office supplies) and updates the reporting.

Automation Saves Time, Yields Better Results

In terms of simplifying the process, automation frees up time for the business owner (or whoever is handling bookkeeping). More importantly, it enables up-to-date cash flow reporting. Users can see reliably accurate figures without manually recording each check, credit, and debit card transaction—or visiting the bank.

Automated reconciliation makes it simple to see the money coming in and evaluate where it’s going. It only takes seconds to capture a real-time snapshot of daily, weekly, or monthly income and expenditures so you can analyze cash flow patterns and evolving trends. Are you spending too much in one area and not enough in others? When reconciliations are no big deal, you’re less likely to get bogged down in the bookkeeping so you can focus on the big picture.

There are other important benefits too. Automated reconciliation helps you flag unscheduled transactions, as well as those that don’t match the usual pattern. As a result, you are better able to catch unexpected, accidental, or suspicious entries so you can spot issues like internal fraud or bank errors more quickly.

Hitting your business growth targets requires leveraging financial resources for maximum advantage, and making tough decisions. Automating the bank reconciliation process is a key part of creating a much more accurate and up-to-date fiscal check-up, so you’re equipped to choose wisely. If you’re interested in learning more about how automated reconciliation can help you manage your business’s cash flow effectively, be sure to reach out to a CRI advisor.

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