What is financial reconciliation and how does it impact your business

Understand the importance of this process and how to implement it in your company’s financial routine

Getting caught off guard by cash inconsistencies is the nightmare of many entrepreneurs. Having discrepancies between the values ​​​​that the system points out and how much money is in the company’s account can be a big headache. Fortunately, there is a solution for achieving good control: financial conciliation.

This tool is super important for the health and financial organization of any business because it helps to better manage money and keep records always up to date.


After all, what is financial reconciliation?

Financial reconciliation is tracking the origin of payment until it arrives in the account of a commercial establishment. It is one of the most essential processes when it comes to management, as it helps to find errors and divergences, contributing to more reliable results. In addition, it can even help to find scams.

It is essential that the reconciliation is preferably done automatically, using the correct tools. This is because, when done manually, it is easier for a flow of decentralized information to happen, which can be lost, in addition to being an unproductive process and subject to human errors.



What are the main types of financial reconciliation? 

There are different types of reconciliations. Below, we explain the concept of each of them:

  1. Card Reconciliation

The objective is to check if the data provided by card operators about your company’s sales have inconsistencies – including failures, fraud, discounts, etc. This process must be carried out every day and, in case of friction, it is necessary to contact the card operator so that corrections can be made.

2 – Payment reconciliation

This process is related to a company’s liabilities such as amounts owed to employees, suppliers, etc. Performing this type of reconciliation is important for the company to be able to negotiate better terms, in addition to always keeping payments up to date – and thus, better credit conditions.

Another advantage is being able to identify flaws in invoice values ​​before they are paid, avoiding losses and headaches.

3 – Reconciliation of receivables

Reconciling receipts is an important strategy to reduce delinquency rates, ensuring that customers pay within the agreed term. Therefore, this reconciliation is essential when taking care of your company’s profits.

For the reconciliation of receivables to be carried out effectively, it is worth investing in the optimization of processes and good tools. In this way, all records of amounts receivable will be kept so that monthly monitoring can be carried out. With the process well developed, your team will be able to go further, performing collections and providing advantageous conditions for advance payments. A good reconciliation also allows for more accurate reports for decision-making, including with regard to pricing.

4 – Bank reconciliation

Finally, bank reconciliation has the function of identifying whether the expected and received amounts have materialized. The process is performed by comparing the company’s cash flow and bank account. Thus, if there are contradictions, it is possible to make corrections for the difference in values. The important thing is to always investigate the cause, which can be a simple external error, internal error or fraudulent activity. Therefore, it is essential to organize and store vouchers.


How about automating your financial reconciliation? 

As you have seen, conciliation is essential for good control of your business. If this process is not done correctly, your company may suffer losses. Therefore, anyone who wants to promote financial health should consider the benefits of automating reconciliations, which are:

  • centralization of information such as accounts payable, receipts, and statements, facilitating access;
  • possibility of registering automatic debits for the payment of suppliers and salaries;
  • reduction of operational effort in bank transactions and less chance of error;
  • greater agility for making financial and strategic decisions, thanks to the reliability of the data.

Organize your company finances

Undoubtedly, maintaining the health of your company is a concern of any manager and this can be facilitated through financial conciliation. Thus, you have optimized processes, in addition to reducing operating costs and dedicating your team’s efforts to more strategic actions.

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