Customer and Vendor Reconciliation Service

Enterslice provides expert customer and vendor reconciliation services. Both processes are essential for the smooth functioning of a business. Vendor payments represent a significant financial commitment for any organization, underscoring the importance of vendor reconciliation in streamlining operations. Customer reconciliations are primarily conducted by service providers like Enterslice. The establishment of robust financial controls hinges on the regularity and accuracy of accounts. To address this, Enterslice offers comprehensive customer and vendor reconciliation services, where our experts diligently manage financial records and Paper works. Reconciling customer and vendor statements prevents inaccuracies and the possibility of false play in the transaction. Hiring a 3^rd unbiased party like Enterslice can prove beneficial as it will help discover any errors or frauds and highlight any inaccurate data mentioned in account statements.

Overview of Reconciliation Service

Reconciliation is an accounting procedure that both small and medium-sized businesses, large-scale businesses, and their accountants must perform to guarantee that the correct balances are logged within their accounts. The duty requires matching two fragments of data, typically one shaped internally and another by a third party, such as a bank, contractor, or customer, and confirming that they match up to give an identical value on a particular date. Completing reconciliation assures business owners that the values Documented in their accounts are precise and allows them to record their cash situation and correctly forecast their cash stream. Reconciliation can be conducted at different levels and for various domains. It can be of many types and can be utilized for different purposes.

Types of Reconciliation Services

Bank Reconciliation

Bank reconciliation is the most basic type of reconciliation, which reconciles a business's cash position by comparing the value of Documented bank transactions. 

Customer Reconciliation

Customer reconciliation is a statement secured from the vendor that comprises details of invoices of the vendor for a particular time. It is part of accounting pursuits as it is typically conducted at the month-end.

Vendor Reconciliation

Vendor reconciliation is the process of reconciliation of a vendor’s account with the statement presented by the vendor. It is the procedure of checking the company’s payables to vendor account balance and vendor outstanding balance or dues.

Steps for Customer Reconciliation

Gathering invoices

It is important to organize vendor invoices by date. Enterslice's reconciliation experts will use tech-enabled processes to assist your accounting needs and perform the reconciliation process.

Inspecting line items

Our experts will match your invoices from the vendor’s statement. Typically, businesses need to reconcile invoices as soon as the shipment or the order has arrived. The invoices must imitate the correct sum and amount of each shipment or order.

Checking matched items

In order to facilitate the process, our experts will also further organize the task by placing a check mark opposite the statements when the invoice matches the line item. After cross-checking, they will let the vendor know of the particular inconsistency.

Compare the totals

Last but not least, our expert will then add all the relevant invoices and compare the amount to the total of the statement. If the total amount does not match, then they will cross-check the calculations again, contact the vendor in case of any error, and let the respective department know about the error.

Services offered for Customer Reconciliation

When you have all your data in one place, comparing accounts and spotting errors is easier. Enterslice’s reconciliation expert will help avoid any challenges that come with the reconciliation of accounts. Here are some of the services offered by our reconciliation experts-

Gather Invoice

Our experts will get in touch with the person who’s responsible for keeping track of all the invoices generated by the vendor. They will also contact the vendor if any invoice is missing.

Inspection

In this step, our experts will cross-check the invoice with respect to the statement generated by the vendor.

Checking matched items

Checking if the item matches the statement produced is crucial, as every amount and quality has to be carefully considered. Our experts will cross-check the statement with the items and ensure they check mark all the items available and inform the vendor if there's any error.

Highlight Inconsistency

Inconsistencies can lead to disputes in the future. It's an important task to find and report any inconsistency found in the statement and the invoice.

Compare tools

Our experts will take various tech-enabled tools and methods to determine proper reconciliation. The tools play an important role as they make the job quicker and more accurate.

Ensure Accuracy

Accuracy is a vital step when it comes to customer reconciliation. Our experts will take appropriate measures to ensure accuracy.

Significance of Customer Reconciliation

Accurate Yearly Accounting>

Reconciling accounts cannot be considered optional, as it is important for all companies to file and Document annual account statements. Businesses that are audited will have the viability of their financial reports and statements put under heavier scrutiny because of the audit process, testing if they’re accurate as well as without any resource misstatement. 

Good Relations

The process of reconciling accounts on vendors will also lead to timely payments. This is crucial to make sure that day-to-day activities are being maintained efficiently. Failure and mismanagement in the process of paying the suppliers can prove to be unhealthy for a business since non-payment can cause a loss of service or resources from significant external investors. Bad or deteriorating relations with the vendor will also result in hindrance in the output generated by a business or a company. This will also eventually lead to unsatisfied customers as their demands will not be met efficiently.

No Penalties

When the process of reconciliation is done accurately, the chances of delayed payments decrease. Financial institutions will not charge any penalties if all the payments are made on time. It is observed that banks and other institutions like banks never fail to put penalties in case of missed payments or exceeding the approved OD (Overdraft) value. Reconciling with a bank on a regular basis will lessen the chances of being charged with avoidable penalties and fines.  

Vendor Reconciliation: Explained

Vendor reconciliation is the process of reconciliation of a vendor’s account with the statement presented by the vendor. This reconciliation of vendor statements necessitates cross-checking vendor invoices with the business’s system. It is the procedure of checking the company’s payables to vendor account balance and vendor outstanding balance or dues. Reconciling vendor statements allows a business to guarantee no inaccuracy or error between what the vendors have indicated and the supplies, inventory, or services obtained by the company. Vendor payments are a noteworthy cash outflow in any business. Usually, the account payables team executes the vendor reconciliation for the comfort of function. Though this job could be tedious and laborious, it offers many crucial benefits to businesses. To guarantee optimal business performance, vendor reconciliation by an expert should be executed and utilized effectively. Vendor reconciliation also allows a business to maintain a positive relationship with the vendor and avoid any disagreement in the future.

Enterslice’s Vendor Reconciliation Services

Some of the key services offered by Enterslice’s Vendor Reconciliation experts are listed below-

Check the opening balance

The opening balance is the first entry in a firm’s account, even when they are first starting up or at a new financial year. Our experts will check the opening balance as a first step of vendor reconciliation.

Agree period entries

In this step, our experts will assign the right amount of revenue and expenses to each accounting period. It is an important step as it will give more clarity on the present situation and the amount to be adjusted.

Checking for any inaccuracy

One of the main goals of any reconciliation process is to eliminate any scope of inaccuracy. Our experts will make sure there are no discrepancies or inaccurate data present in the system. 

Omit Inaccuracies

After the reconciliation has checked for any inaccuracies, they will then omit and remove any record that has been mismanaged or is presenting inaccurate data. They will contact the vendor to get the necessary changes done.

Allocate credit notes and payments.

In order to reduce the outstanding amount on a particular invoice, our experts will allocate credit notes and payments to one or more invoices. After the process of allocation of credit notes is done, to ensure accuracy, our reconciliation experts will check and omit any error present in the process and the statement.

Significance of Vendor Reconciliation

The process of vendor reconciliation is important for many reasons. The process aids in maintaining accurate and actual financial statements and records. Through reconciling an account payable, a person can identify any inconsistencies or faults in the records and the statements. This process allows an individual to rectify the mistakes so that no issues and disputes arise in the future. The process also helps a business in managing its cash streams. By assessing the remaining payments and invoices, an individual can manage and plan their future expenses and ensure that they have enough cash in hand to meet future obligations. The process also aids in maintaining healthy vendor relations and guarantees reliability.    

Ensuring Accuracy in Vendor Reconciliation

Our experts ensure that each of the purchase transactions has been duly authorized. Particularly, suppose the vendor invoices and related Documents are paper-based. In that case, the Document between what has been approved and processed as a transaction. Further, the recording of transactions is verified promptly. Vendor invoices are reviewed to ensure they’re posted and processed timely by the accounts payable department. In case of any discrepancy, the same is followed up with the processing department or the respective authorizing department. All the payments and credit notes that are shown on the supplier statement should be allocated against invoices.

Steps for Vendor Reconciliation

Checking Opening Balance

The starting point of the vendor reconciliation process is to agree on the opening balance on the account payables ledger of the vendor with the balance as shown on the vendor statement, in other words, checking the opening balances on a business's ledger and the vendor statement. The ongoing month's opening balance must be equivalent to the last month's closing balance. This is the first thing a reconciliation expert will do: tallying the opening and closing balance of two consecutive months.

Inspecting line items

In the next step, our expert will match the line items on the vendor statement with the invoices. Usually, a business resolves the vendor invoices when the shipments arrive so that the invoices reflect the right sum and amount for each shipment. All the items appearing on both the vendor’s accounts in the accounts payables and vendor statement are removed for the overall reconciliation procedure. The reconciliation expert checks off once the items match with the items received and keeps a note on any item missing in the shipment. 

Differences

All the remaining objects that aren’t eliminated in the step above signify either an item in the account payable record and not on the vendor statement or the vendor statement but absent from the accounts payable ledger or items. These inconsistencies can happen due to reasons like errors, timing differences, and omissions. It can be a possibility that the vendor may receive the notification much later than the time the order was placed, or there can be a chance that either side can lose the record of a transaction, which will lead to discrepancies in the balance sheet.

Other Reconciliation Services

Account Reconciliation

Account Reconciliation is a significant step in the financial statement close procedure. The act of paralleling a balance in a business's GL, which is the general ledger, to the balance on an independent statement and finding any variations helps in reassuring accountants and business stakeholders that their business’s books and accounts are well maintained. It is considered best when account reconciliation is carried out on a regular basis. Regular account reconciliation ensures that the account statements visible within a specific timeframe are precise and accurate.

Business Specific Reconciliation

This type of reconciliation deals with the specifics of an individual business. If we take the example of a company that sells goods, they need to do a stock take to make sure that the inventory value in the account balance sheet displays the value of goods kept in the inventory. For this, an individual has to physically compute the number of goods kept. Different businesses with attributes that deal with an individual presenting a number that is required to be reimbursed or paid for by the company will need to reconcile the balance once.

Intercompany Reconciliation

Intercompany reconciliation is generally done in a company that has many subsidiaries. This process lets the parent company deliver precise consolidated accounts. The process parallels the booked value of the amount that is owned or owed by one business with the balance of its equivalent. The reconciliation is considered successful if the balance in both the companies’ accounts appears to be the same. Reconciliation ensures that any fake profit or loss is exposed and omitted.   

Benefits of Reconciliation Services

Precise Data

The reconciliation process ensures that correct data is reflected in the company’s balance sheet. It enables a business to identify any accounting errors, theft of goods, and unrecorded bank transactions.

Gain Assurance

Regular reconciliation assures trust in the financial declarations produced. It lets the accounts team in a company aware of the statistics and that the data are precise, authentic, and trustworthy.

Internal Regulation

Regular reconciliation lets a company know about its cash flows, which enables a business to establish internal controls. This helps a business in taking proper preventive measures. 

Audit Advantages

The process of reconciliation has many significant audit advantages. It boosts the financial closing process, decreases the scope of human error, and lets the administration focus on other significant business processes.

Enterslice’s Expert Reconciliation Services

Reporting

Enterslice’s reconciliation experts will build statements that highlight any records that are not consistent between the bank statements and the GL.   

Issue Management

Once an issue arises, our experts will identify it and move ahead with the subsequent resolutions to solve it.

Transaction Matching

Our experts will pull data from varied sources and compare or match them. They determine rules to create a business-wise matching rule.

Classification

Our experts will also classify the records and the other attributes related to the process in different segments for clearer understanding.

Trade Reconciliation Service

Trade reconciliation refers to a group of post-trade actions related to identifying and settling trade breaks. A collapse or a trade break can arise because of various reasons like irregular costs, erroneous accounts listed, insufficient funds, etc. Enterslice's reconciliation experts, along with the support, will be responsible for inspecting all trades recorded over a fixed period of time and computing a set of errors, exceptions, or breaks to review. For the purpose of analysis and resolution, the data will then be sent to the trade execution desk to procure data on the trade breaks. Our experts, along with the support personnel, will collaborate to identify and rectify the legitimate trade breaks. All the trade data will be refreshed to resolve breaks, and all the systems will be updated to reflect these changes.

Cash Reconciliation Service (Reference: Our Success Story)

This is the kind of reconciliation that is done by all kinds of organizations, irrespective of their domain. In this, our experts will perform a reconciliation between the internal account statements and the admin book statements. Regular cash reconciliation omits cash balance miscalculations or mistakes and maintains account statements accurately. Enterslice helps the administration to get this process done without disturbing any in-house employees.

Ledger Reconciliation Services

Reconciling the Vendors

In this process, our experts list irregularities between the account balance and the vendor’s remaining balance that is to be paid by the company. This process helps an organization guarantee that the supplies and services are precise.

Reconciliation with Customers

Around the time of month end, reconciliation with clients or customers is done to close the account balance for a particular month. This process involves comparing a company’s remaining customer balances.

Reconciliation between Businesses

In this process, our expert will reconcile the financial statements of a parent company’s financial transactions between its subsidiaries. It makes the cash stream transparent and safeguards coherent transactions.

Position Reconciliation Service

The motive behind this step is to check and make sure whether the administrators or the managers are retaining the same amount of securities with an equivalent party as the number mentioned in the counterparty's internal system declarations. Numerous funds and structures in the securities marketplace are regulated by statute to practice the reconciliation process periodically, but currently, it has become a regular practice to omit any trading or operations risks. The procedure involves matching position balances between two or more origins, usually a broker statement and internal systems.

Advantages of Hiring Enterslice’s Experts

Customer reconciliation is of great significance as it impacts the revenue of the company. This is also essential at the time of auditing. Vendor payments are a noteworthy cash outflow in any business. Usually, the account payables team executes the vendor reconciliation for the comfort of function. Though this job could be tedious and laborious, it offers many crucial benefits to businesses. To guarantee optimal business performance, vendor reconciliation by an expert should be executed and utilized effectually. Our experts will ensure early settlement of the discount taken and will make sure that no duplicate payments are made. They will assist in identifying procure-to-pay issues and identify unprocessed payments. Validating balance sheets and determining accruals will be part of our expert’s day-to-day duties.

Risks of Not Hiring an Expert

Depending on the size of the business, there are multiple risks associated with the process of reconciliation. Not hiring an expert for the same can lead to challenges that revolve around technical expertise and the number of records to reconcile. Delayed procedures can lead to many miscalculations, inconvenience, and sluggish management. Corrupt personnel may take advantage of the steps and methods to hide evidence of illicit behaviour within the company.