Best Practices to Improve Account Reconciliation

Best Practices to Improve Account Reconciliation

         Account reconciliation is known to be a very common and vital task for many certified public accountants. It is important to understand some helpful tips in order to be better at account reconciliation for any business or industry. First, the balance sheet should be prioritized and many people are using what is known as the “risk-based approach” in order to improve their job performance. This approach emphasizes the need to give more consideration and attention to the accounts with the highest likelihood of error. In order to do so, one can place a “risk-ranking” to each account from high, medium, or low to determine how a business should handle each account. Secondly, identifying a defined and standardized practice for a business can drastically increase productivity. Organizations should have a standardized account reconciliation template and controlled process throughout the company. Thirdly, technology plays a huge role in our common everyday lives and it should be utilized to help improve account reconciliations. Developed software such as BlackLine, Trintech, and Hyperion are used by many businesses in order to aid the account reconciliation process. Some key features can include automatic notifications, automated balance interfaces, useful dashboards, and system security features. Along with technology and software, analytics are a vital in understanding performance and can help predict future improvements for a company. Another useful tip is not trying to always be perfect. Mistakes are common and it can be a waste of time to try to reconcile low dollar values to the penny. Understanding these tips can help any company or business that can use improvements in account reconciliation. Using a combination of these practices can definitely help any team or organization in their performance and lower the chances of mistakes.