How Daily Bank Reconciliation Could Optimise Your Cash Management

Bank account reconciliation is an incredibly important task within any business. It’s how you understand the cash position of your business, identify when clients haven’t paid and it’s what allows you to forecast and plan our financial position for the future. But amazingly, a large number of businesses are only reconciling their bank accounts once a week or even once a month. This may be in part because it is an incredibly repetitive and time consuming task. But mistakes often get missed this way. Red flags go unnoticed, customers go on without paying and suddenly you end up in the red without knowing how. To help businesses combat this, Invenio designed a bespoke solution, based on SAP framework, that will help businesses optimise their cash management with daily bank account reconciliation.

Increased Control

The best decisions are made when the decision makers have all of the information they need, correct and up to date. But an alarming number of business owners are making important decisions about their businesses future based on out of date information through unreconciled bank statements. It might seem like a trivial thing but an up to date bank statement is quite a powerful thing for a business owner – it enables them to make key purchasing decisions, plan for the future of their business, create frequent, accurate cash flow forecasts and inform decisions that could ultimately change the future of the business. By having up to date cash data, business owners can be in more control of what they ultimately do with it.

Improved Cash Flow Predictions

With improved financial forecasting capabilities comes an increase in cash flow management, which in turn directly impacts how you manage your cash on a daily basis. With the most up to date information in your hands, you can make more informed decisions on how best to utilise your current working capital. This means you can easily avoid overspending, which could leave you struggling to cover costs in the short term. It also means you can compare your current cash flow position with that of your forecast, giving you a good indication of performance and where improvements need to be made.

Better Reporting

Reports are only as good as the information they are based on. For businesses, understanding the financial health of their business is key to making both critical and every day decisions, which means those decision makers need to be able to access up to date information at all times. If the bank accounts are only reconciled once a week, you only know the accurate state of the business on that day, which might not necessarily be today. But if your bank account is reconciled daily, your systems will be able to use current information to generate accurate data and real-time insights into your business, significantly improving your ability to manage it effectively.

Enhanced Fraud Detection

Sadly, hackers, criminals and even common thieves are all starting to switch their gaze to businesses. They typically have bigger bank accounts that aren’t checked as regularly or closely as personal ones, so it takes a long time before businesses notice something is wrong. By then they could have stolen a significant amount of money - but not with our help. By implementing a system that can reconcile your bank accounts daily, you significantly increase the chances of detecting fraudulent activity before it has a chance to do serious damage. Automated daily reconciliation highlights abnormalities in your business bank accounts and credit cards instantly, giving you the chance to put a stop to it early.

Working with Invenio’s bespoke solutions, businesses have managed to achieve a 90% success rate in matching payments with the transactions on the bank statements automatically, drastically reducing the need for time-consuming manual intervention. Not only that, but they found that their overall cash flow position improved with the greater control over spending, and frequent examination meant that problems were flagged in the early stages, when they were easy to solve. To find out more about the bespoke solutions Invenio can create for your business, just get in touch with one of our experts today, or click here to download our Daily Automatic Bank Reconciliation brochure.