Is Account Reconciliation Automation Like A Driverless Car?
In one word, “no”.
Account reconciliation automation does not mean that all accounts needing to be reconciled will be auto reconciled with no human involvement.
This is good news as accountants, according to a Robert Half survey, like to solve problems. And we all know how key accounts, and/or high risk accounts, can have more monsters in them than a child’s closet at night.
Most account reconciliation automation solutions will auto reconcile around 30 to 40 percent of your less complicated accounts. This may include your prepays, your non-material accounts, those that do not have monthly activity, and those that should be zero.
Auto reconciling, or system reconciling, means that during implementation the vendor and customer designate thresholds governing algorithms that tell the account reconciliation automation solution which accounts it can handle.
As an example, SkyStem’s ART would then reconcile the designated accounts, once the general ledger is uploaded. When the preparer or reviewer, depends on how you set it up, log in to ART, they will see which accounts have already been reconciled and those they will need to work on. They will net a huge time savings with ART’s auto reconciliation because now all they have to do is glance at those accounts and either submit or sign.
Should ART detect unexpected behavior in one of the accounts it’s supposed to system reconcile, for example if a zero-balance account is not zero one particular month, it will flag it and alert the assigned preparer that they will need to investigate and reconcile that account.
When it comes to the more complicated accounts like those that may have high levels of monthly activity, complicated formulas or may be considered high risk, an accountant needs to be in the driver seat. Human logic is still needed in these situations.
The account reconciliation automation tool saves the accountant time on high risk accounts by automatically producing the coversheet or checklist. Most tools have a handful of such coversheets or checklists that they call forms. These forms end up standardizing reconciliations, keeping those working through the reconciliations from taking their unique path to complete the reconciliation.
Another way account reconciliation automation tools save time is by carrying supporting documents forward. Additionally, everything auditors may need is now all in one place.
While improvements to the account reconciliation process and the month-end close process do not get the attention that driverless cars do, they are already well proven as beneficial and will continue to improve the work lives of many an accountant.