Today's Environment Makes Accurate, Efficient Reconciliation Processes Essential

An order goes out, an invoice comes in, the payment is made – what could be simpler?  However, as we all know, this straightforward transaction isn’t always so easy.  There are many reasons why the reconciliation process can become a burdensome responsibility fraught with the potential for leakage.  Exceptions to the process through returns, changes, disputes or credits for example, can increase the cost of processing an invoice by up to 10 times.  Not only do these exceptions take up valuable time, more crucially, they tie up an organisation’s working capital.

In today’s volatile business environment, it is essential that the reconciliation process is swift, visible and efficient, so that any discrepancies have a minimal impact.  Some FDs say that the manual handling and reconciliation of exceptions is just a normal cost of doing business.  However, while it is true that these exceptions can never be eliminated – the way they’re handled can be. Without an automated system, your organisation could easily fall victim to a situation where the exceptions in the reconciliation process become out of hand, tying up working capital for months.

An automated Process will allow the following:

• Receive Prepare Recognise Capture Manage Create Pay
• Email Batch Prep Extract Data Clear Exceptions Create Release for Payment
• Fax Scan Validate Comments Archive image 
• Mail Split Complete   
• Web Enhance    
• EDI     

5 Key Benefits of Automating Reconciliation Software:

1. Incoming fax invoices are made available to your chosen software platform for data capture and analysis. Invoices received as paper documents can be scanned and made available to the system. Other electronic format such as email or EDI follow the same path.
2. Invoices are automatically analysed to extract pertinent business information. If desired, an email message can be sent to the internal user as notification that a specific invoice is awaiting validation.
3. Using a web interface, the user validates a side-by-side view of original and captured data. The system automatically checks to see if the vendor and order numbers (for PO invoices) exist in the ERP system. For invoices with POs, some platforms can perform two-way matching of the invoice with the PO, or three-way matching of the invoice with the goods receipt. If the capture is not accurate, the user can easily teach the package how to recognise similar invoices in the future.
4. 
   Once the data is validated and exceptions have been cleared, your provider automatically posts the invoice in the system for further processing. If for any reason the invoice should not be posted, it can be parked while waiting for further information or somebody's approval. This invoice includes all the attributes of the original. Your provider should be able to flexibly create the invoice but set a payment block
5. The invoice document and related process information are readily available for reporting and analysis. Your sutomated Workflow solution will route the document to the appropriate person for subsequent processing. The system allows for automated handling of exceptions such as master data maintenance, assignment change or resubmission at a later date. All steps and data in the process from invoice receipt to invoice entry and approval are recorded and continuously updated, creating a detailed audit trail for each invoice transaction

While there is still some hesitation over the adoption of an automated reconciliation process among some organisations - due in part to a general lack of awareness of its benefits - in nearly all cases, it redefines the rule of exceptions and streamlines the process for the organisations and their customers.  The end result of which is increased profitability and a more satisfied customer base.

Suggested Automated Reconciliation Suppliers:

Trintech ReconNet
Ariba
Harbour Payments
Quadrem