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Automated bank reconciliation means handing the comparison of bank statements and accounting entries over to software. Statements are imported every day, transactions are matched according to rules (amount, date, reference, description) and the accountant only has to deal with the exceptions.
Key takeaways
- Automation rests on three building blocks: statement import, ledger entry import and matching rules.
- A well-configured solution automatically reconciles the vast majority of entries.
- Accountants can focus on outstanding items, analysis and the close.
Why automate bank reconciliation?
Bank reconciliation is essential, but its manual steps are slow: importing the bank entries, importing the accounting entries, checking the balances, ticking items off, then producing the statements. As soon as the business grows and transactions multiply, the spreadsheet reaches its limits.
Automation addresses four issues:
- Save time on a repetitive task, every month and for every account.
- Reduce errors in data entry, amounts, omissions or date mismatches.
- Have an accurate cash position every day, not just at month-end.
- Make the audit easier with a complete trail of every reconciliation performed.
How does automated bank reconciliation work?
- Automatic statement import through a secure bank connection, using EBICS TS or SWIFT, including card statements.
- Import of accounting entries from your ERP or accounting software.
- Rule-based matching, from the simplest rule (same amount, same date) to the most refined (invoice reference, description, date tolerance).
- Handling of exceptions: unmatched transactions are presented to the accountant, who can annotate them.
- Generation of adjusting entries for fees, commissions and overdraft interest.
- Production of reconciliation statements in PDF or Excel, detailed or summary, for the external accountant and the audit.
Which matching rules should you set up?
| Rule | Example | Use |
|---|---|---|
| Same amount and date | A €1,250.00 transfer on 12/03 on both sides | The simplest cases, which make up the majority |
| Same amount, date tolerance | A direct debit hitting the bank 2 days after it was booked | Bank processing delays |
| Reference or document number | Invoice number quoted in the transfer description | Customer receipts |
| Description and keywords | Description containing “URSSAF” or “COMMISSION” | Recurring charges and bank fees |
| Grouping of lines | One cheque paying-in against several entries | Paying-in slips, grouped payments |
Good to know. With precise configuration tailored to your own data, E-Finances’ bank reconciliation solution automatically reconciles up to 91% of entries.
Automate up to 91% of your reconciliationsThe E-Finances solution imports your statements and matches your entries according to your rules.
Discover the solutionERP module or dedicated solution?
| Criterion | ERP reconciliation module | Dedicated solution |
|---|---|---|
| Implementation | Quick if the ERP is already in place | Configuration project, supported by the vendor |
| Matching rules | Often basic | Fine-grained and customisable |
| Multi-bank, multi-company | Varies | Built in |
| Automation rate | Limited on complex flows | High, even on large volumes |
| Audit trail and statements | Standard | Annotations, history, customisable statements |
An ERP module is fine for modest volumes. For companies that process thousands of transactions a month or manage several banks and entities, a specialised solution delivers a markedly higher automation rate.
How do you get an automation project started?
- Measure where you are today. Number of accounts, monthly transaction volume, time spent on reconciliation.
- Connect your banks. Automatic retrieval of statements via a banking protocol.
- Define your rules based on your real flows, starting with the most frequent.
- Test on a closed month and compare with the manual reconciliation.
- Fine-tune the rules month after month to push the automation rate higher.
Frequently asked questions about automated bank reconciliation
What automation rate should you aim for?
It depends on the quality of your bank descriptions and invoice references. With configuration tailored to your data, a specialised solution can automatically reconcile up to 91% of entries.
Do you need dedicated software or an ERP module?
An ERP module is enough for modest volumes. A dedicated solution becomes worthwhile with several banks, several entities or a large number of monthly transactions.
How do you deal with unmatched items?
They are presented to the accountant, who analyses them, annotates them and posts the adjusting entries. Old outstanding items should be investigated, because they can point to an error or to fraud.
- Autorité des normes comptables — French general chart of accounts (in French)
- economie.gouv.fr — practical guides from the French Ministry of the Economy for businesses (in French)
Director of Sales at E-Finances, a French financial software publisher for more than 25 years.
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