A finance officer at a distribution company matches the bank statement with the company’s records every month. Last month, it took nine working days.
Most of that time was not difficult work. It was finding the same payment in two places, one tick at a time. Why does matching take so long?
What Bank Reconciliation Is
Bank reconciliation compares your records with the bank’s. You check that every payment and receipt in your books appears on the statement, and the other way around.
Differences are normal. The task is to explain every one of them, so you know your true cash position.
It is one of the most important checks in accounting, because it can reveal errors, missing entries and even fraud.
A simple example: your cashbook shows a payment to a supplier, but the statement does not. Perhaps the cheque has not cleared, or perhaps the payment was recorded wrongly. Reconciliation tells you which.
Many businesses do this monthly, but larger ones may do it weekly or even daily. The more often you reconcile, the smaller each job becomes.
Why Matching Takes So Long
Volume is the first reason. A business with hundreds of daily transactions has thousands of lines to match each month.
Timing is the second. A cheque written on the 29th may not clear until the 3rd. A card payment may reach your account days after the sale.
Descriptions are the third. The bank describes a payment one way, your invoice another, and your cashbook a third. The finance officer can spend hours working out which line belongs to which customer.
Errors add more work. A transposed number or a payment entered twice means hunting for a difference that exists only because of a typing mistake.
Many businesses also reconcile only once a month. By then, the transactions are weeks old, and details are harder to remember.
What Automatic Matching Can Change
Matching software compares transactions across sources and pairs those that clearly belong together. ReckSoft, a reconciliation platform, is built to do this across bank, cashbook, invoice and point-of-sale records, using AI-assisted matching.
The obvious matches can be handled quickly. Your time then goes to the exceptions, meaning items that do not match or that look unusual.
That can change the job from ticking lines to reviewing differences. People remain in charge of the judgement calls.
Rules can handle common patterns. For example, a payment with the same amount and a matching invoice reference can be paired automatically. Anything uncertain can be left for a person to review.
This can also help growing businesses. As transaction volumes grow, a manual process takes more and more time, and automatic matching can help keep the workload manageable.
What Still Needs a Human
Software cannot know why a customer paid twice, or whether an unexpected charge is genuine. Someone still needs to investigate and decide.
Clean inputs also matter. If your cashbook is incomplete or invoices are missing, any tool will simply show more exceptions.
The team then spends more of its time on the unusual items. Where does your team spend most of its matching time?
Review also means checking whether matches make sense. A payment can match an amount but belong to the wrong customer. A sensible review looks for this.
Getting Ready to Reconcile Faster
Start by tidying your own records. Record transactions promptly, use consistent descriptions and keep invoice references clear.
Then measure how long each reconciliation takes today and where the time goes. That tells you what to fix first, whether by process or by software.
Even without software, a weekly reconciliation habit beats a once-a-month marathon. Small, regular checks are easier to finish and easier to trust.
Agree on a regular day for reconciliation, such as every Friday. Small batches are easier to match, and errors are caught while they are fresh.
Keep a short note of recurring differences, such as bank charges or timing items. Over time, the list shows which causes are routine and which are not.
Spend Less Time Matching, More Time Deciding
JS Morlu Gambia can review how your reconciliation works today and where the time goes. Our accounting team can help you tidy your records so matching is cleaner, and through ReckSoft we assist with accounting system setup. The aim is a faster, more reliable reconciliation, with your team’s attention on the items that really need it.
To learn more about ReckSoft, visit www.recksoft.com.