Best Practices for Account Reconciliation

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Account reconciliation is an underappreciated yet critical control to help ensure an organization's financial integrity. Weaknesses and inefficiencies in the reconciliation process often lead to mistakes on the balance sheet and overall inaccuracies in the financial close. 

Since the enactment of Sarbanes Oxley (SOX) in 2002 and other rules and regulations that have followed, ensuring the accuracy of account reconciliations has become increasingly important. In the past, if an external auditor found a material error during review of a company's financial statements, it could still be corrected by the company with an adjusting entry. In most cases, the controller wouldn't have to issue a restatement, nor would the auditor have to report the error. 

With the advent of SOX, the call for compliance has risen to another level. If the auditor finds a material error, the company may be required to disclose a failure of controls. And, if the auditor finds a misstatement while reviewing the quarterly or annual SEC reports that the company cannot prove it would have found on its own, then the error is determined to be a material misstatement and a material weakness that could also require disclosure. 

An efficient, accurate, and timely financial close cycle (beginning with the account reconciliation process) can create a foundation for evaluating business performance, supporting organizational decisions, and satisfying external reporting requirements. Automation of the account

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By Reconciliationaccounting
Jun 26th 2015 01:11

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By Steve
Jun 26th 2015 01:12

I am struggling to compile a Debtor's Reconcilliation

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By Danrod
Dec 1st 2017 09:12

Apart from making work easier for both auditors and controllers, automating financial accounts is also an important step toward easing the entire processes involved in the operationalization and daily running of a business.

Account automation also enables early detection and prevention of financial frauds in the business. By consolidating different types of payments into one electronic file, automation also helps in the simplification of the payment functions of a company, making the entire process more reliable and faster in execution.

Financial automation is an essential solution for all kinds of businesses, whether startups, growing companies or even established commercial entities. It is something that could be highly valuable to accountants who are used to striving too hard for approvals and are looking forward to going paperless.

Moving from the old paper system to the use of accounts payment automation software enables owners of businesses to run them even more efficiently and more profitably.

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