e-Solutions
e-Reconciliation
Each side keeps its own records, and the two rarely look identical. Reconciliation is the work of finding where they differ and agreeing why.
Record comparison
Two sets of records, one list of differences.
Reconciliation is not about the lines that match. It is about the ones that do not.
Records from both sides
Your records and the other party's records are brought together
Comparison
Lines are set side by side on criteria you have agreed
Differences
The real work is explaining the lines that do not match
Starting point
A difference is not the same as an error.
Reconciliation compares the records two parties keep for the same transactions. Most of the time both sets describe the same business; they were simply not entered at the same moment, at the same level of detail or in the same shape.
Timing explains some of the differences: one side books a document within the period, the other after it has closed. Scope explains others: an amount held on a single line here may sit across several lines there. Corrections are a category of their own, because a past line is usually answered with a new one rather than changed.
So the work does not begin by automating the comparison. It begins by defining what “a match” actually means in your organisation.
Common situations
- The same transaction falling into different periods on each side
- An amount held on one line here and split into several there
- Correction entries that cannot be read alongside the original line
- Comparison carried out by hand in spreadsheets
- No clear owner for explaining a difference
Workstreams
Definition first, automation after.
Scope is set together, based on how your records are kept and what you need to compare; each workstream is assessed within the current process.
Defining a match
Which records are compared, on which criteria, and what counts as a difference is written down.
Reviewing how records are kept
The fields the comparison rests on are examined on the ERP side, where gaps and inconsistencies usually surface first.
Process and ownership
Where a difference goes, how it is explained and where it is closed are agreed, so reconciliation does not rest with one person.
Controlled rollout and monitoring
Work starts with limited scope and is tried against a real period; after go-live the flow is monitored.
Delivery approach
We do not automate work that is not yet defined.
Automation helps once the comparison criteria are clear. Before that, it only adds to the list of differences someone has to explain.
Mapping the work as it stands
Which records are compared, how often and by whom is written down together.
Agreeing the criteria
It is settled which line answers which, and which situations call for an explanation.
Adapting the ERP side
The fields and recording steps the comparison depends on are arranged within the current process.
Rollout against a real period
A real period is worked through, the differences are reviewed and the criteria adjusted where needed.
Scope note
The scope of reconciliation differs from one organisation to the next
Which records are compared, with which parties and how often is different in every organisation. That is why this page does not set out a fixed scope or a feature list.
The scope that applies to you is defined together, once your current records and what you need to compare have been reviewed.
Let's look at where the differences come from.
Let's go through the comparison work you do today and the way your records are kept, then agree the scope and the sequence.