Simplifying End of Month Reconciliations with Expense Management
End of month reconciliations likely aren’t a highlight for your finance team. A necessary evil, reconciliations ensure that the money leaving an account matches what is being spent. By performing this task regularly, you can rest assured that your accounts are accurate, spot fraudulent charges, and catch errors. It is also a great way to identify ways to save the company money.
If this monthly task has business benefits, then why is it such a headache? Well, many accounting teams are dealing with messy reports, inaccurate data, and struggle with reconciling across multiple accounts–a reality of business today.
It’s a totally different story for finance teams utilizing a modern expense management tool. Thanks to technology, closing out the month is a breeze as a result of clean data and streamlined processes that enhance efficiency.
Easing the Burden of Monthly Reconciliations with Expense Management
Closing out the month and understanding the role of expense management technology from the perspective of the finance team can seem confusing for other stakeholders in the company. For starters, not all expense management tools are created equal. Some solutions on the market today push the use of a single corporate account to drive efficiency and eliminate disparate data sources. This is hardly a viable option for many companies today as employees likely will need to be reimbursed for expenses on personal cards or corporate spend will occur on other accounts. Further, customers of companies that push the one card mantra are penalized with unbundling fees if they do not require single source purchasing. Yikes!
At TravelBank, we believe data hygiene and stellar expense management is a much more likely success factor than forcing everyone to use one corporate card. To gain a better understanding of the monthly close requirements, let’s take some time to address some frequently asked questions pertaining to monthly reconciliations.
In accounting terms, what does reconciliation mean?
In the accounting world, reconciliation refers to comparing internal financial records to statements from your bank, credit card, or other financial institutions, to ensure they are aligned.
Why do I need to reconcile my accounts?
Month end reporting involves a review and analysis of both accounts receivable and accounts payable. In addition to ensuring the accuracy of your accounts, these reports will provide critical data that can be used as a baseline for business decisions.
What types of accounts should be reconciled monthly?
Bank accounts, credit card statements, payroll, 401k accounts, lines of credit, and loans should all be reconciled monthly to ensure all of your ducks are in a row from a financial perspective.
What is involved in month end reporting?
Month end reporting involves reviewing the account types mentioned above to ensure your records align to external statements. You also need to ensure proper documentation, such as receipts, are provided by employees. Once the reports are finalized, they should be reviewed against budgets to make sure corporate spend is on track.
Customer Spotlight: OnRamp
OnRamp, a top name in data security, helps clients successfully protect highly sensitive information and critical IT infrastructure. The team was seeking a better way to manage expenses and make monthly reporting more efficient (it was taking up to 3 days)
Since its implementation in 2017, TravelBank has helped streamline work for OnRamp’s Accounts Payable team. “Beforehand, there was so much stress involved in trying to get the American Express bill reconciled each month and get expense descriptions clear enough for auditors,” says Sherrie. “TravelBank has made it so much easier to cover those bases and has sped things up so much that I’m able to get monthly reporting done in less than a day now. Plus, a lot of our staff are saying the expense tracking software made their life a lot easier, and they really feel like this has helped them. It’s been a great tool for us.”
Clean Data and Good Expense Management are the Key
In a perfect world, every business expense across your organization would float neatly into the same report from the same account. Realistically, your finance team needs access to clean data and a great expense management tool. With the right system in place and accurate reporting, it won’t matter how many sources of expenses there are, as each expenditure will be easy to track and balance.
If you’re looking for an expense management solution that will support not only end-of-month close, but the day-to-day needs of your employees and finance team, then look no further than TravleBank. Our all-in-one travel and expense management app is a game-changer for companies seeking to simplify reporting, have better data, and more efficiencies for everyone.
We’ve put together The Buyer’s Guide to Evaluating Expense Management Solutions. This is a great resource that explains why modern business expense apps are a game changer for companies looking to improve efficiency and accuracy. Give it a read and please don’t hesitate to reach out with questions.
