Defining Reconciliation Strong™ (< 4 min)

"Being reconciliation strong is a journey – a journey with amazing outcomes, ones that you may not have even expected. 

We’ll start with a smarter close cycle.  Note that I didn’t say shorter although it can most definitely be a result.  As an important control, performing your reconciliations as part of your close is critical.  If you’re reconciliation strong, you’ve determined the right timing of when to prepare and approve reconciliations during the close, you understand the impact of reconciliations on other close activities and you are clear on the roles and responsibilities of all involved in the reconciliation process.  Your close cycle is smooth – no one day or no one person feels more burdened than another and everyone gets what they need when they need it and the data can be relied upon on.

That brings us to the next component of being reconciliation strong.  Trusted financial statements. If you are reconciliation strong, you can trust your numbers and so can others because they are supported by quality account reconciliations.  You truly know what is in your financials.  Individuals who have confidence in their data can make quicker and sounder decisions, taking advantage of opportunities that could lead to greater profit and potential for the organization. 

Next is ready for audit. If you are reconciliation strong, you're not going to be fumbling around trying to find documentation for the auditors.  It’s not a fun day when they’ve asked you to pull a certain reconciliation and you realize it hasn’t been completed. Getting reconciliation strong will entail identifying any audit readiness gaps and addressing them.  It means reconciliations can stand on their own.  You’ll be prepared no matter when the auditors want to perform their work.  And, less questions because when they know they can rely on your reconciliations, they’ll have more comfort in your financial statements.  This results in much more efficient audits – for both you and the auditors.

Optimized technology.  Reconciliation leading practices are enabled by technology.  While this presentation is technology agnostic, it is true that technology can increase the efficiency of your reconciliation process.  But this only really works if you already understand your reconciliations, your accounts and your balances.  It doesn’t work to optimize a process if you don’t understand why you’re doing it to begin with or what you are trying to accomplish.  For example, do you understand why you’re reconciling a particular account, what the balance should be and why, and what types of transactions are going into and out of the account and if those are correct?  If you are already using technology, such as a financial close optimization tool, to enhance your reconciliation process, being reconciliation strong does mean that you are using that tool properly and taking advantage of its capabilities.

Nimble team.  If you're reconciliation strong, you’re agile.  You’ve built roles and responsibilities based on strengths.  You have multiple people on your team who know how to perform each reconciliation, especially the riskier account types.   You have relationships throughout the organization – no silos.  The more everyone knows, the better they can support each other and the business.  A team cross-trained by subject matter experts is not only a benefit that accountants truly appreciate but a benefit to the organization as well.

Last is growth in accounting talent.  You’ll accelerate your potential through reconciliation literacy. I truly believe that the more you understand about reconciliations, the greater of a resource you will be to your organization.  This involves a defined learning plan that includes concentrated exposure to accounting excellence practices, involvement in continuous improvement initiatives and interaction with subject matter experts.  But, most importantly, it involves your desire to learn.