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Account Reconciliation Services For Your Business Security

Last updated: 26 Feb, 2020 By | 6 Minutes Read

Proper and accurate record keeping is vital for any business irrespective of its size and structure. It is mandatory to have financial statements that reflect the actual picture of a company’s operation.

However, it is not always because of any fraudulent intentions but because maintenance of accounts requires a high degree of professional expertise on the part of the accountants – something which cannot be said and vouched for all. Further, in even an averaged sized business it can even be full of complexities due to a large number of accounting heads that have to be tallied against each other.

What then is the takeaway from all this? It is that if accounting functions are not one of your basic core competencies, you’ll do well by outsourcing account reconciliation process to specialized agencies so that the process of finalization of accounts is speeded up and optimum accuracy is ensured. You can then channelize all your resources towards your core activities while experts look after the onerous task of keeping your books in order.

This is crucial for you as it safeguards your business from a number of pitfalls:

Eliminating discrepancies

Updated account reconciliation helps to quickly track any discrepancies and rectify it. Kept undetected for long mistakes can lead to the wrong compilation of reports which if submitted to statutory and regulatory bodies can lead to imposition of fines and unnecessary litigation when detected.

Eliminating fraudulent transactions

Continuous reconciliation of accounts goes a long way in doing away with fraudulent transactions by unscrupulous elements within. It also insulates your business interests from risks of scams which otherwise can lead to disastrous consequences in terms of loss of credibility before both customers and investors.

Enabling precise auditing of accounts

If your accounts are kept thoroughly reconciled at all times by proficient outsourced account reconciliation services; it facilitates precise auditing and finalization of your accounts. This is very important both for your shareholders and lenders as it reflects a true picture of your operating efficiencies.

While no account head is a standalone feature and each is equally important in the overall process of preparing financial statements, two important facets stand out that requires special attention from you.

Bank reconciliation

Your business books cannot be a mirror image of your bank statement. This is due to posting same entries at separate times in two different journals. A check issued by you is immediately debited from your company’s records while it can be presented by your client to the bank even after a month for debit.

Therefore there will be an inflated amount in the bank as per your records. Again, a check received by you will clear an outstanding debt payable to you immediately in your books but will take awhile for the actual amount to be credited in your bank account. This reconciliation process if kept in cold storage for long will not give you a fair idea of the state of your business and might lead to wrong estimates of payables and receivables, thereby disrupting your business.

Credit cards reconciliation

This is similar to reconciliation of accounts with your bank statements. Not having it done will result in the possibility of either drawing on your account beyond permissible limits or underestimating your financial strengths.

In all cases of outsourcing, whatever industry it might be, the goal is common to all – reducing costs, enabling increasing attention to core competencies, negating the need to hire highly paid accounts manpower resources and eliminating investments in expensive infrastructure systems. Given its importance, you’ll do well to decide on the type of account reconciliation services that will work best for you.

Comprehensive reconciliation services

All that you have to do is to inform the outsourced agency of your transactions like checks issued and received and the clients’ accounts they pertain to. They will carry out a detailed matching process with the bank statements and issue you reports periodically so that you are always in the loop about the state of your business.

Partial reconciliation services

Request for services that you require. This might include only checks paid or deposited, a position of stopped checks or any other information that you think will permit you to run your business smoothly.

Since account reconciliation service is so crucial for your organization, always make sure that you delegate the task to a reputed agency with long years of experience in this field.

Secure your finances and maintain them proficiently with Cogneesol’s account reconciliation services. Our accurate reconciliation will help you gain valuable insights into your financial data to make better strategic decisions for business growth. Contact us today to get started with your free trial.

Recommended Post: How Can Technology Modernize Accounts Reconciliation?

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