Last week, we looked at the benefits of financial reconciliation. We also discussed why the manual way of reconciling data is driving many companies to forfeit this practice altogether, even though it may be costing them money.
So, what is the solution to all this?
Well, in most cases, it’s certainly not off-the-shelf data reconciliation software, and we’ll explain why.
See, most readily-available bank and broker account data reconciliation software is a one-trick pony. This is because a lot of these apps let you reconcile data from a limited number of sources at a time or else handle data that comes in one specific format only, which can be a problem when you keep in mind that:
- You’re receiving data from multiple sources, like banks, brokers, merchants, and so on; and
- You’re receiving data in the many different formats, including as email attachments, online ledgers, API, EXCEL sheets, and PDFs.
But there is an even bigger issue here, and that is that most applications that let you download and convert bank and broker statements may not integrate into your current system at all.
Where does this leave companies?
Unfortunately, such data reconciliation software often turns out not to be much of a solution at all, as it ends up costing companies more time and money.
Why? Well, for a number of reasons, actually.
- If the broker and bank account reconciliation software can only work with just a few suppliers at a time, then you will need to purchase multiple apps to deal with all your suppliers separately.
- If the software can only reconcile data from one specific format, such as EXCEL sheets, then your employees will still need to download and convert any bank and broker statements that are not provided in EXCEL before the software can work.
- Even if you invest in multiple balance sheet reconciliation software apps, the probability is that not all of them can be easily connected to your system. This means that, after all this, you will be left with multiple reports that still need to be manually checked against what has been inputted in your internal ledgers.
But are there any real solutions to this data reconciliation software problem?
Yes, there is a solution, but before we get into that, it’s important to understand the wide array of data formats a true solution should be able to read, convert, and reconcile to be effective. We look at this in more detail in our 7 Types of Data Formats for Reconciliation article.