The importance of relationships in reconciliation

Reconciliation is an activity which is impossible to complete in isolation. After all, for something to match, at least two sources are required.  

However, gaining the sources you need to complete reconciliation can sometimes feel harder than finally reuniting the Gallagher brothers. Yet, just like an Oasis tour is now happening, it is also possible to bring together everything you need for reconciliation to take place, as long as you have the right relationships in place.  

So, what relationships should you work on to ensure that your reconciliation runs smoothly and delivers impactful benefits?  

APIs  

In the UK, the volume of transactions flowing through its near-instantaneous Faster Payments System continues to grow at 8% YOY, the average iGaming operator has 3 - 5 PSPs, whilst most e-commerce sites offer 5 - 10 payment methods. Inevitably, businesses of all forms are therefore handling more transactions than ever before. Nevertheless, they are still required to meet the same financial deadlines such as month-end and are in fact facing more reporting demands due to new regulations perpetually arising.  

As a result, businesses cannot afford delays when accessing data necessary for reconciliation. If they do, they are immediately placed on the back foot and will face an uphill battle to arrive at the data integrity required to fulfil their financial requirements.  

Considering that most businesses find themselves in the same boat, it might be presumed that it is known that data sharing is in everyone’s best interests. Sometimes, however, certain firms are not the most proactive as it is considered an additional task. Moreover, given the increasingly fast pace of data creation, when data sharing is completed manually, there is even more resistance as it will inevitably be something they must continually repeat.  

Fortunately, such manual work isn’t necessary these days as a solution exists in the form of APIs – these connections between sources allow data to move freely and swiftly. However, the format in which data arrives after flowing through an API must be considered, too. Even if your relationship is the best between your data sources, you still might have to do some extra work on your end – as is the case with any relationship – transforming it into a consistent format ready for reconciliation. Yet the automated reconciliation platform, Aurum, does that for you with its ETL functionality.  

Operating to provide financial leaders with guaranteed data integrity on time so they can fulfil regulatory compliance and make informed business decisions, Aurum simplifies the entire end-to-end reconciliation process. This includes the sourcing and transformation of data before the main matching event occurs. As such, Aurum possesses a bank of over 600 APIs, accommodating for any number of banks, PSPs, and ERPs which firms wish to have a brilliant data-sharing relationship with.  

Internal communication  

Accessing intel from external sources such as banks, PSPs, and more can be difficult; however, that does not mean it’s any easier from within businesses. After all, departments aside from finance are also busy. Plus, they rarely have any perspective on what matters to finance teams, such as timely and accurate access to data.  

As a result, chasing the sales department for expenses, HR to update new employee tax bands, and marketing for software invoices are all regular pains for finance teams. Just like reconciliation can’t take place without external data, it also can’t when the respective internal data isn’t provided.  

Aside from hoping a Lunch & Learn on the importance of reconciliation will resonate with other departments and they will overnight become diligent about their finances and data sharing, what can be done? For starters, there is the route of a different kind of education. One which emphasises the perils of late financial activities by experiencing them first-hand. Suddenly, expenses aren’t reimbursed as swiftly, nor should they be if no receipts are provided. Maybe then the importance of accurate financial promptness will be appreciated.  

However, this is an extreme course of action that we don’t advise considering the negative impact it can have upon working dynamics. Instead, it is much better to invest in a solution that works for everybody. This way, everyone is assisted and can experience the benefits of data sharing and timely reconciliation. Examples include easy-to-use expense software via phones such as Xero and payroll software for HR like Sage.  

Your team  

With your data sources acquired – both internal and external – and transformed into a matchable format, reconciliation can commence. However, collaborative work doesn’t end there. Good relationships must continue to prevail.  

After all, the product of reconciliation is to communicate financial positions and insights. Firstly, though, communication on discrepancies is needed so that exception management can take place and adjustments can be made. With no time to waste on uncovering potential fraud, Aurum includes a built-in messaging system, allowing colleagues to notify one another of discrepancies. Best of all, it doubles up as an audit tool because all messages are captured.  

Important stakeholders  

Once reconciliation is completely finalised after exception management and signed off (another auditable feature in Aurum), relationship building can continue.  

CFOs, regulators, board members, and even clients all really appreciate receiving financial insights, and they are even more grateful when they receive intel in a format that is easy for them to digest. Reconciliation, therefore, is a task that should come nowhere near Excel - nobody enjoys working in a spreadsheet, nor do they like looking at one.  

When sharing insights that reconciliation reveals to stakeholders, it is therefore always best to do so in a visual format, like with Aurum’s dashboards. After all, when information is transformed from numbers and words into graphs, peoples’ perception of accuracy grows from 68% to 97% and data visualisations can shorten meetings by 24%. These results are bound to improve any relationship.  

Admittedly, in some instances, a different form of presentation is needed. For example, the FCA requests that companies holding client money submit CMAR reports monthly. These follow a strict format in structure and timeline. Again, complying with these demands is key for sustaining a good relationship, this time with the FCA. Fortunately, Aurum can assist here, too - minimising the time spent on reconciliation to mere minutes and automatically inputting the correct data into CMAR reports ready for submission.  

Finding the perfect partner in reconciliation  

Having external partners on board, internal parties invested, and your finance team working smoothly are all conducive to a good reconciliation process. Yet sometimes, good isn’t good enough, and in the matter of reconciliation, we strongly agree with that.  

That’s why it is not just our automated reconciliation platform, Aurum, that facilitates great relationships between everyone involved through APIs, built-in messaging, visual dashboards, and more. Our entire company ethos is about fostering even better results through developing strong collaborative relationships. From having the industry’s best support team, who close 87% of cases within a day and have a 100% 5-star rating on Trustpilot, to a driven delivery team that acts as an extension of your own, everyone at Aurum Solutions works tirelessly to be your perfect partner in reconciliation.

Choosing the right partner to automate your reconciliation is therefore arguably the most important relationship for your financial operations. Ready to say hello? Book your Aurum demo today.