How AP Automation Can Make Bank Reconciliation Painless

How AP Automation Can Make Bank Reconciliation Painless

November 6, 2018 Off By Eli Pappas


Bank reconciliation is a long and tedious process that all companies must go through. Basically, this requires the comparison of accounting records made by the company in regards to all of its bank accounts. This comparison process should also include any and all modifications that were made by the bank on the said accounts. During a bank reconciliation, the AP department will be working harder than ever and can easily become overwhelmed with the task at hand.

For companies that have invested in automated AP payments, the entire process becomes easier to manage. These are the different ways that AP automation can make bank reconciliations relatively painless:

Automatic Bank Statement Matching

Once a request for all transactions for the statement period has been exported to the AP system, it will automatically match all statements from the bank and what is found in the system. This will generate a report and highlight any inconsistencies from both sides in a matter of minutes. If done manually, the matching of transactions can take hours, even days to accomplish.

Easily Locate Previous Reconciled Statements And Other Documents

It is important to know the closing balance indicated on the previous reconciled documents for accuracy and consistency in the present reconciliation. The documents and others are easily pulled from the hundreds, possibly thousands of files with the use of the automated AP payments system. There is no need to waste hours looking for old files when it can be accessed digitally within a few seconds.

Any And All Deposits In Transit Are Noted

There are many instances where the accounting shows inconsistencies because there are deposits that are still in transit between the dates included in the statement. These deposits can be tracked manually but can easily be forgotten during the reconciliation process, but when an automated payment system notes the payments in transit, it will be included and highlighted to ensure the reconciliation matches penny for penny.

Correcting Wrong Values

Human error is very common in the manual accounting process and this can become a problem during bank reconciliation. There are even instances where the bank will be at fault for entering the wrong data. This can be corrected manually of course, but it will take time and a keen sense for detail to detect the incorrect values immediately. However, an automated system will be able to detect the inconsistent values in minutes and direct the AP department’s attention to the issue to correct it at once.

Double Checking Before Closing

The accounting department will usually spend hours or days looking over and double checking all of the statements to ensure that the balance matches on the bank statement. An automated system can do the double and even triple checking in a matter of minutes to guarantee accuracy. Once everything is double checked, the statement can be closed with a click of a button.

Alleviate some of the pressure on the AP department the next time bank reconciliation is scheduled by upgrading to an automated AP solution. The system will make the task easier without compromising accuracy, so it will benefit the AP staff and the company as a whole.

Nexus’ AP payments solution include options to use a virtual credit card, ACH, or outsourced check. Contact us today for more details.