Payment reconciliation is critical for any business that handles multiple payment methods. It involves comparing financial transactions in your accounting system with transactions in your bank statements, credit card statements, and other payment systems. This process is traditionally done manually, which is time-consuming and prone to errors. However, with the rise of automated payment reconciliation solutions, businesses can now automate this process and enjoy greater efficiency and accuracy. In this blog post, we’ll explore the benefits of automatic payment reconciliation and why it’s the future of finance.
1. Greater Efficiency
Evention’s Director of Professional Services, Matt Smallbone, sat down with us to share the common headaches he’s seen in manual reconciliation. “I think the one thing we hear most often is that the process requires so much manual transformation that it puts them in constant catch up mode. So much so that they often have to write off over/shorts because they just weren’t aware of them in time to do anything about them.” Automated solutions can reconcile payments from multiple sources in minutes. According to a survey by the Association for Financial Professionals (AFP), automating payment reconciliation can reduce the time spent on manual processes by up to 50%.
2. Improved Fraud Detection
Fraud is a significant concern for businesses of all sizes. The Association of Certified Fraud Examiners (ACFE) reports that companies lose 5% of their revenue to fraud each year. Automated payment reconciliation solutions automatically identify discrepancies and inconsistencies making it the best way to stay on top of this concern. Many companies include a budget to address the significant fraud losses they experience every year. Manual accounting processes keep or even increase that budget, automation can lower those losses by 52%.
3. Increased Accuracy
Human error makes the reconciliation even harder. In fact, EuSpRIG writes “over 90% of spreadsheets contain errors. Because spreadsheets are rarely tested these errors remain. Recent research has shown that about 50% of spreadsheet models used operationally in large businesses have material defects.” These errors can be simple human mistakes like duplicate entries, missed transactions or in the worst scenarios incidents of fraud that go untouched for years. Automated payment reconciliation solutions use advanced algorithms and machine learning to identify and flag discrepancies, reducing the risk of errors.
4. Enhanced Reporting
Automated payment reconciliation solutions offer advanced reporting capabilities that provide businesses with valuable insights into their financial operations. They are able to quickly generate accurate reports and provide more detailed and comprehensive reporting by analyzing large amounts of data and identifying patterns not immediately apparent using manual processes. All this to say automated solutions will lead to more effective planning, budgeting, and forecasting.
When choosing an automated payment reconciliation solution we recommend Total Recon by Evention. Choosing a solution that can handle all means of payments, including cash, credit cards, and loyalty points, is essential. Here’s why Matt advocates this to clients, “With Total Recon they can be up to date… this means they can do follow-ups, violations and find solutions proactively. The time savings leads to cost savings by allowing the accounting staff to stay on top of it.” Experience the benefits of automated payment reconciliation with Total Recon, the proven solution trusted by businesses for nearly 20 years.