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Lessen the Burden of Accounts Reconciliation. Start Outsourcing
Accounting is all about precision, accuracy and reconciliation. Every business aims for exponential growth, free from fraudulent transactions. Invariably, reconciliation and balancing of books are at the very core of the double entry bookkeeping system. But there are two different aspects to it. A reconciliation is your reality check on the actual financial standing of the company. B, also, you should know the authorizing professional for reconciliation.
Therefore, you should have a systematic process. It helps to identify even the smallest lacunae in books. Given its importance, there is always a need to have accounts reconciled at regular monthly intervals. Not doing so can have disastrous consequences for any company.
An example of bank reconciliation will prove this point. This is a process that sets off items in a bank statement against those in the cashbooks of the company. Why are there discrepancies between the two? When you receive a check, enter it in cash and then sent to the bank for clearance.
For that period your books will show inflated cash on hand. If you go by it, drawn checks for payments to vendors, it will put you in trouble. Ultimately, you will not have balance to cover. The balance you see in cash books is only notional and not actual. Hence bank reconciliation at regular intervals is essential to know your financial position in the market.
The example given above is as simple as it can possibly get. In reality, accounts reconciliation is a very complex and tedious task. Consider the same scenario with hundreds of items that should match against each other. Doing it in-house will entail engaging manpower and installing highly expensive hardware and software, all of which can all be avoided if you choose to outsource accounts reconciliation.
How Accounts Reconciliation Outsourcing can Help your Business
Free up time to focus on core competencies
From what has been seen so far it is obvious that if you take up in-house reconciliation of accounts and have to track and monitor different entries, you or your company will have little time for anything else. By choosing to outsource you can concentrate on core activities and take your business to the next level.
Outsourcing agencies take up accounts reconciliation comprehensively so at any point of time you know the financial state of your business with updated reports to back it up. And you can also be very sure that the picture you’ll get will be accurate in all respects.
Ensure accuracy under all heads
Accounts reconciliation is simply not a process that matches general ledger Cash with the amount in the Bank; it takes along all other heads of accounts too. How is this possible? You issue a check to cleaning services by debiting you P/L Maintenance Head and crediting cash. The servicing company deposits the check after a period of time and it is cleared by your bank.
Now note, that by simply completing bank reconciliation activity for that month you also make sure that the specific head of P/L is also in order and accurate. Hence when you outsource accounts reconciliation broadly, most complementary heads of accounts will also be balanced by them.
Closely monitor your financials
One of the factors that weigh on the minds of any businessman is how true his records are and whether they are clean in all respects. This burden can only be lessened if the reconciliation of accounts is done promptly.
Cash ledger is your internal record and that has to be matched with bank statement which is maintained by an external institution. Once these two are balanced you can be sure about the authenticity of your accounts and reports generated. Any policy decision that you may take based on data and updated reports provided by outsourced agencies are therefore deemed to be exact and reliable.
Reduced documentation and paperwork
The bane of any business is the huge paperwork and documentation that has to be dealt with and processed at all levels in the accounts department. It is actually a burden and consumes man hours that can easily be better deployed in more productive activities.
When you outsource accounts reconciliation the agency will match all invoices and documents both in paper and electronic form while arriving at the final figures. This one aspect if taken off your daily activity routine can work wonders by increasing business efficiencies.
It can, therefore, be said that outsourcing the process of accounts reconciliation is not only a wise business decision, by any standards, it will also be a smart business decision too.
If you are wondering which direction to take for outsourcing accounts reconciliation, get in touch with Cogneesol. We are industry leaders in accounts reconciliation with highly trained manpower and latest technology to optimize the process. To know more, contact us at +1-646-688-2821 or write to [email protected].
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