Simplifying bank reconciliation for small businesses

Ross McGee
Ross McGee

Bank reconciliation is something businesses of every size have to tackle in order to keep their financial records in order.  It’s a process which involves the comparison of bank statements with internal accounting records, and can be especially arduous for smaller businesses who might lack the team power and resources to stay on top of this regularly in addition to everything else they have going on. In fact, 25% of SMEs reported experiencing high costs and lengthy times when it came to manual reconciliation.

What’s more, as organisations begin to scale, bank reconciliation can become even more of a chore with the number of transactions going up  – and the chance of mistakes increasing in turn. This is why making the process faster, without the risk of more mistakes, is becoming an increasingly attractive option to many growing companies. 

Streamlining the reconciliation process 

Time is a precious resource for any organisation, but especially small and growing businesses. For this reason, tasks which are especially time-consuming are the first thing any strategic expert would look to streamline. Doing so helps to address the challenge of time scarcity. Given that financial reconciliation is infamous for being a lengthy process, streamlining it should be on top of this list for smaller organisations that are looking to save time as they plan to grow. Here’s how:

Automate data entry, matching and more 

Automation offers a potentially transformative new option for overstretched financial teams who are looking to free up time for themselves, whilst still ensuring bank reconciliation is handled proficiently. 

Opting to automate bank reconciliation is a decision that more and more growing businesses are making. With the option to take the headache out of everything from importing bank statements to cross-referencing data entries to ensure that they match, it comes as no surprise. But the capacities of automated bank reconciliation don’t end there, with everything from the automatic management of FX rates to generation of journal entries also being possible through the use of cutting edge software such as Aurum

Regular reconciliation schedule 

It’s no secret that the best financial teams run a tight ship. To stay on top of the various financial admin tasks which need to be tackled, routine is essential. Otherwise, the more you fall behind, the more things fall out of order.

Bank reconciliation is known for often being a lengthy task, but the good news is that it can be kept more manageable, especially when automated and scheduled regularly. Importing bank statements is a classic example of how falling behind can lead to potentially damaging technical errors – as the longer the process is put off, the longer the statements are to import, drawing out the process and also increasing the risk of technological errors

When managed correctly and regularly, bank reconciliation does not need to be stressful. Sticking to a reconciliation schedule means that exceptions don’t pile up, or – worse – get missed altogether. This is why Aurum offers a scheduler that is always running, even working overnight, so that finance teams can review anything that’s been caught out of hours when they’re back on the clock the next day. 

Categorise transactions 

Staying organised is an absolute necessity when managing financial data from a range of sources. This way, it’s much easier to pinpoint issues when they do crop up – and it also helps to avoid them occurring in the first place. Categorising transactions is one key way of ensuring that things are easily managed and kept in order. This way, you can separate everything out – from scheme fees to exchange fees and even salaries and expenses. With everything clearly, visibly labelled the whole process is kept much tidier.  

This is something Aurum is especially adept at. By recognising transaction codes and allowing for logic-based rules to be built off the back of them, users can categorise transactions as they wish.

Leveraging technology and tools

While once effective technology solutions were reserved for bigger companies with the budgets to match, today, tools such as Aurum have become much more accessible and hence more widespread. Although finance teams might naturally be sceptical about handing over important processes to technology, it’s important to remember that such automated solutions are actually much more accurate – and can still be reviewed by team members internally. 

This is why investing in technology now is the best option for small businesses, especially those that are in the process of scaling upwards, or hoping to grow in the near future. It saves time, helps to avoid unnecessary errors as workload grows, and generally allows for more time spent on the important stuff without hours lost to arduous financial processes such as reconciliation. 

Today, businesses have the option to pick out a plethora of technological options to aid financial teams in their daily work. From invoice scanners which take the pain out of inputting finicky details to reconciliation platforms that do more than just ensure data integrity but also set them up for growth with additional payment options. Considering that 13% of SMEs admit that additional payment options exasperate their existing reconciliation processes, the deployment of the latter can be very beneficial.

Training vs. outsourcing 

Adopting software such as Aurum is becoming more and more of a no-brainer for those in the know who are handling finances for small businesses. While such software doesn’t negate the need for human oversight and management, it effectively streamlines the process of bank reconciliation into something which can quickly and easily be managed by either internal members of staff or even outsourced to finance contractors. 

Still, once teams have adopted the software, it makes the most logical sense to ensure it can be used and overseen by internal members of staff. Luckily, Aurum is a highly intuitive piece of software that allows teams from businesses of all varieties and types to hit the ground running, rather than joining the 37% of small businesses that outsource their accounting function.

Better still, Aurum Solutions is passionate about setting all our software adopters up with any training required to ensure they’re getting the absolute best out of it. This training is essential in laying a good foundation from which small businesses can then scale with confidence, knowing their finances are fully compliant and their team fully competent. 

Keep reconciliation simple

Inevitably, small businesses must juggle a whole range of competing business demands and ambitions. While they might not have the same resources as larger companies, they are still expected to manage the reconciliation process with the same accuracy and dedication as those with much bigger teams. 

This is why investing in cutting-edge yet affordable technology such as Aurum is advisable for finance teams of all sizes. To reconcile whilst small with no problems and continue to do so with same ease as you grow, book your Aurum demo today.

Ross McGee
Ross McGee

Content and Community Marketing Manager

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Ross McGee is a marketing manager at Aurum Solutions who deep dives into financial processes, technology, and best practices to share insights that help finance professionals of all levels maximise their potential.

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