Bank Reconciliation Process (BRS)

Bank Reconciliation is a process followed by almost every company to maintain its financial health. The company’s transactions are reconciled on a monthly, weekly or daily basis.

Reconciliation involves a manual effort of around 5 hours (daily basis) or periodically by an accountant or a bookkeeper to precisely compare the large volumes of data from the company’s bank account statement to the financial records maintained by the company. In the end of which the balance in the company’s bank statement and the amount in the financial records should tally.

Though some of it can be handled with straightforward one to one comparison of the entries with the help of reconciliation software or automation through RPA, the reconciliation process involves the following levels of data comparison a) One to One b) One to Many c) Many to One and d) Many to Many which may require sophisticated logic or advanced analytics to reach a 95% reconciliation.

The challenges involved in reconciliation are :

1. Large volumes of data
2. Data formats in Bank Statements or Company’s financial records
3. Timestamp of the data

The following exceptions are to be taken into account while attempting to reconcile the data which are the reasons for the unmatched transaction cases:

1. Deposit Transit: Deposits that are marked by the bank but not processed by the Bank, which results in a higher balance at the Company’s financial records
2. Outstanding cheques: Single or multiple Cheques that are released by the Company but not processed by the Bank show a lower balance in the Company’s financial records than the Bank Balance Amount.

• Auto debit and credit Transactions: Credit of Interests or Deduction of the rates charged for the Transactions in a Bank also need to be considered during data reconciliation

All the above criteria are to be looked into while reconciling the bank statements with the company’s financial records.

RPA handles all of the processes involved in the reconciliation of data. The approach uses the basic Uipath Activities to achieve reconciliation. It moves one step ahead of using Uipath in a time of digital transformation instead of the traditional spreadsheet.

1. Identification of Bank Statement Formats: Excel Activities of Uipath are used.
2. Extract and Format Bank Statement – Excel Activities of Uipath are used.
3. Fetch Records from Company’s Financial Records – UiAutomation along with Excel Activities.
4. Reconciliation of Data – DataStructures, Regular Expressions Basic Variable Activity and Queries are used.
5. Submission of Reconciled Data – UiAutomation along with Excel Activities are used.

• Improved the accuracy and speed of reconciliations from 5 hours to around less than 20 minutes. As the RPA does reconciliation several times a day, the accounting staff productivity also increases.
• Provides visibility of data to trace the data from its sources like Banks Statements, matching, exception management and final submission. Useful in case of audits for traceability and transparency…
• Reduces the risk of human-generated data errors as much as 50%.
• Analyzing and evaluating high volumes of data quickly, accurately and efficiently. Providing reliability.
• It also provides the reconciled report to the Accounting staff at the end of the day for any of the exceptions that the RPA could not handle. Humans can use their cognitive skills to solve the exceptions.
• Eases the tedium of looking at accounting sheets all day by the Accounting staff.
• Re-run matching process as and when the new Bank Statements are received.