Redefined and streamlined processes lead to high-value reconciliations and clearances, fastening month-end closure timelines

The Client:

A Canada-based leading consumer health services organization.

Scope of Work

Complete support with:

End-to-end accounting including Accounts Payable, Accounts Receivable, General Ledger.

The Client:

Process Bottlenecks

Inadequacies of ERP migration led to the following issues:

  • Unreconciled and unapplied payments in accounts payable worth 6Mn
  • Unreconciled and unapplied receipts in accounts receivable worth 8Mn
  • Unreconciled clearing accounts for 5Mn
  • Unavailability of previous reconciliation reports
  • Improper categorization of general ledger
  • System information vs. tax return variance
  • 2 months lag on records processing

Cogneesol’s Optimization Solution

Considering the range and scale of the problems that had plagued the processes, we divided our team into separate sub-teams to address the issues process-wise. We drew up existing process flows, identified gaps that had led to the piling up of issues, redesigned process flows to make them error-free and compliant. Along the way, we developed process documentation to emphasize and institutionalize the proposed steps. Given below is a glimpse of some of our corrective measures:

  • Tracked and organized historic vendor payment details, consolidated data to clear disputed vendor accounts
  • Identified items requiring manual adjustments, listed due receivables and reconciled with unapplied receipts
  • Reconciled AP, AR, and clearing accounts that sorted a significant number of outstanding checks not cleared by bank
  • Redesigned Chart of Accounts (COA) structure to be in sync with tax return and GL processes focused on improving the granularity of accounting information, manual adjustments made to improve allocation accuracy
  • Dedicated resource engaged to ensure daily point-of-sale reports are entered and reconciled with the bank account by using technologies that sync directly with the new ERP system.

Cogneesol has set our accounting house in order! We had staggering amounts in unreconciled accounts. They cleaned the books, cleared the accounts, and have reduced our closure period. They are now an extension of our Finance department.

Impact Delivered

The above streamlining of processes and introduction of process controls created intelligent operating models delivering immediate and lasting impacts:

  • Applied and reconciled vendor payments worth 6Mn within 15 days; increased and maintained vendor satisfaction rate at 97%
  • Past due receivables worth 8Mn cleared within 17 days; accuracy of cash application rate maintained at 99% through the last year
  • Reconciled clearing accounts for 5Mn within 20 days while maintaining accuracy and TAT
  • Allocation accuracy and timeliness improved from 70% to 98%
  • System information mirrored with tax return
  • Cleared current year backlog within 30 days
  • Month-end closure reduced from 15 to 10 days

Client Testimonials

It is always a pleasure to learn that the work we do has positively impacted our clients and that they are happy to share their experiences.

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