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5 Reasons To Automate your Bank Reconciliation in SAP
by Jodi Abrams
All companies are used to doing a monthly bank reconciliation (some, more frequent than that). Completing the bank reconciliation process in SAP (ECC or S4HANA) ensures that information in your SAP system, matches the financial records from your bank. Manual bank reconciliation involves reconciling transaction that you already have in your system such as checks issued to vendors with the checks that have cleared from your bank account. it also requires creating some additional journal entries for other items such as bank charges.
However, this is labour intensive and time-consuming process. Though a better way exists in SAP, the truth is most companies aren’t using it. Either never taking the time to make use of the standard functionality, or not even knowing it exists. There are many benefits to setting up automatic bank reconciliation in SAP. Let’s take a look at them.
1. Save Time
Not only will you save the people-hours needed to manually carry out these tasks, but you will save that time when your account department is the busiest – at month end. This is the time when you have many other financial tasks to carry out and when you could most use a few extra hours back. From manually entering the data, to checking and double checking for errors, the time savings here adds up quick. It’s not unusual to get back a day or more per bank account you automate.
With a manual process, errors will happen. Especially with large volumes of data entry. Finding any of these errors when the totals just don’t match can be tedious.
3. Fraud Detection
With automatic bank reconciliation, and cases of fraud will be caught early and can be addressed. By catching it early, you are likely to prevent further issues.
4. Your Staff
Doing a manual reconciliation is repetitive work each and every month. It takes meticulous organization and attention to detail. Finding and retaining staff with that capability will be a challenge. When you do find the right person, you can bet they don’t want manual bank reconciliation to be their career path. Automating this gives them a chance to work on it but free up their time for other initiatives.
5. Reduce Costs
Not only are you reducing your costs because you are using less people power to reconcile your accounts, but with greater accuracy you are reducing your rework time as well. In addition, with the increased confidence in your accounts, and clarity on the process, you will achieve synergies in your financial process knowing you are making decision on up to date and accurate information every time.
Configuring automatic bank rec in SAP does take some time and testing, but the return on investment is huge and quickly pays for itself. With the right SAP Finance expert helping, they can make it a painless process to get set up. If you want to hear more about how this can work for you in SAP ECC or S4HANA, please reach out to email@example.com.
With input from Sam Sayrafi
Jodi is an expert in SAP and eCommerce integration, and is Vice President of Applications for CONTAX.