Effortless payment reconciliation

Reconciliations represent a process of payment data synchronisation. Inner transactional data of a business account is compared with vendors’ statements to make sure all expected payments or/and payouts have been actually finalised (i.e. successfully processed).

How it works

The overarching aim of this procedure is to define the cash position and help both sides spot discrepancies or make sure all data in certain accounts coincide.

To better understand the concept of reconciliation, imagine two ledgers or datasets. One of these comprises all transaction details from your account, another — details about payments on the provider’s side. After having been initiating payments and receiving payouts during a specific time period, it’s important to reconcile the balances.

The payment reconciliation process at Corefy can be executed automatically or manually with the use of our API. Time periods usually depend on the type and size of your business. The more transactions take place daily, the more often you should reconcile.

Reconciling your account statements, you might stumble upon certain balance mismatches. Such discrepancies can take place in several cases. For instance, a certain amount of money transfers or checks you’ve issued have not been processed yet. Or it can be a deposit in transit — your internal outflow is processed, but your bank is still on it.

Monitoring your internal financial processes allows you to keep your balances healthy and provides for more informed company-wide strategic decisions

Pros

Being aware of your payments flows state is a must, for it allows you to plan and arrange further investments smarter.

• reduces unnecessary manual work;
• allows to keep further accounting mistakes at bay;
• eliminates the human-factor error;
• helps pinpoint fraudulent transactions;
• helps to plan further spendings and investments;
• allows to diagnose the relationship between the incoming and outgoing payments flows;
• helps to define the processes that need your specific attention.

Cons

There are certain tricky moments to be aware of during reconciliations:

• it implies specific issues when done manually (the human-factor errors might take place);
• results may have missing transactions (this can happen if a transaction was modified during the process);
• uncleared checks or mismatches (this might be caused by a variety of reasons on your bank’s or provider’s side).

Reconciliations are generally divided into two categories — manual and automatic. Both types are widely used but are intended for different types and sizes of organisations. The bigger the organisation is, the better it is to execute automatic reconciliation instead of the manual one.

They also define the following types of financial reconciliations: vendor reconciliation, bank reconciliation, customer reconciliations, and internal company or business-specific reconciliation.

The essential point of reconciliations is the ability to face facts. It allows you to see if all the expected transactions recorded on your side were actually processed and finalised. In case there are some pending transactions or some errors happened, reconciliations enable you to see it on time and take reasonable actions. Pinpointing weak points and spotting collisions in your records allows for proper control of your payments flows.

Our platform is fully equipped to automatically tackle instant reconciliations for several accounts (including various methods and currencies). You can also import providers’ statements in bulk and execute manual analysis of your accounts statements.

Tackling reconciliations with Corefy, you avoid unnecessary manual work. The essential points on behalf of reconciliations are reliability and time-efficiency. It helps you match the data from your accounts with that from the providers’ side quicker, leaving you more spare time to be spent on strategic analysis of the received data.