Outsource account reconciliation for security and reducing financial discrepancies

Every business, whether a start-up or a large enterprise; hardly undermines the importance of having accurate and reliable account reconciliation. While, a large number of businesses have to juggle core and non-core activities, they often opt to keep non-core activities like account reconciliation, bank reconciliation, credit card reconciliation, inventory reconciliation, bookkeeping, payroll management etc., in the back-seat.

It is here that they make a big mistake. When the accounts are not reconciled, it adds up to the complexities. Moreover, lack of proper account management results to a series of fraudulent activities and financial malpractices. Account and bank reconciliation problems and solutions largely loom over them due to lack of account reconciliation experience.

More likely they would want their CPA firm to handle or help them manage it. However; the challenge remains that are you or your CPA firm equipped with the kind of expertise and time required to handle this activity, petty but crucial to your business.

So basically, account management demands high levels of professional proficiency on the part of accountants, something for which no one can vouch for. Therefore, you could always partner with a specialized accounting services provider to outsource account reconciliation process.

Outsourcing your accounts reconciliation shoulders half the responsibility of your business. These outsourcing partners channelize and devote valuable resources for your accounts and bookkeeping activity, their area of core competencies, to help you further leverage your business development.

In addition to this, outsourcing account reconciliation safeguards your business from various financial pitfalls like:

• Financial discrepancies: Updated account reconciliation ensures quick monitoring of any sort of inconsistencies and even correct it on time. If, they remain undetected for long period time, can result into complication and even lead to wrong report compilation. These reports, when submitted to regulatory bodies, leave you with heavy fines and unnecessary litigations.
• Reduced deceitful transactions: Continuous account reconciliations are helpful in keeping a check on the fraudulent transactions by any internal corrupt sources. It also protects business interests, from the threats like scams and frauds, which otherwise results into dire consequences. You may suffer loss in terms of credibility before the investors and customers.
• Enable precise accounts auditing: Outsourced account reconciliation services, enable your business to have precise auditing and finalization of your finances. This becomes very significant for both the shareholders as well as lenders, since this reflects an accurate picture of the operational efficiencies. 

While, it is true that accounts reconciliation is a not standalone process, there are two really important facets which stand out and requires special attention. However, outsource your account reconciliation services, and it can be handled effectively.

Banking reconciliation:

It is a widely known fact that business accounts should never be mirror image of bank statement. This mostly happens because of making similar entries at two separate times in the different journals. For an instance – a check issued by you gets debited immediately from company’s records; however, your client presents the same check to the bank, after a month. Your records will show inflated amount in the bank. Therefore, reconciliation process, if ignored or procrastinated for long, leaves you with a blurred picture of the financial health about your business and possibly lead to erroneous estimation of accounts payable and receivables. This apparently can disrupt your business.

Credit card reconciliation:

This is quite similar to bank statement reconciliation. In this case, if it is not done appropriately, it may likely result into withdrawing from the account, beyond permissible limits or undervaluing the financial capabilities. When it is outsourced it reduces the cost and allows you to focus more on core competencies.

Given your business requirements, you can decide the type of account reconciliation services that suit your unique business requirements:

Comprehensive reconciliation services: Under this type of services, you need to inform the outsourced agency about every transaction, including issued and received checks, as well as clients’ account as they are related to these transactions. Moreover, professionals can carry out a thorough process with the bank statements and issue to ensure they are well in-sync.

Partial reconciliation services: It covers certain services, which you require and make a request for. This might consist of only paid or deposited checks, status of stopped check payments or related other information, which you think will help you to carry out your business effortlessly.

Final thought

An organized and well-maintained account statement plays a significant part in offering 360 degree perspective about the overall financial conditions of an organization.  Therefore, you need to hire professional accounting and bookkeeping company with rich experience and exceptional credentials of working with small and medium size businesses and their CPA firms.