The accuracy and reliability of financial reporting are vital for organizations to make informed decisions and meet regulatory requirements. To ensure the integrity of financial data, accountants and bookkeepers rely on the general ledger account reconciliation process.

This process involves comparing general ledger accounts with supporting documents using reconciliation software to identify discrepancies and take corrective measures.

The advent of automated reconciliation software has revolutionized this process, serving as a transformative solution. In addition to accelerating the reconciliation process, reconciliation software also enables an audit trail, significantly improving transparency and accountability.

In this article, we look at some of the leading reconciliation software or reconciliation tools and also cover how Nanonets can automate reconciliations.

What is reconciliation software?

Reconciliation software is a specialized application that automates and streamlines the financial closing process for businesses. Acting as a centralized platform, it retrieves data from the general ledger and compares it with bank statements and invoices, facilitating accurate and swift account reconciliation. This software allows users to electronically validate and finalize reconciliations, which are then sent to approvers for review. Once approved, the reconciled data is securely stored in a centralized database, ensuring an auditable trail. Additionally, reconciliation software offers features such as document upload, access to company policies, electronic signatures, comments, process controls, and user-friendly dashboards for financial insights.

Reconciliation software is vital for modern finance departments, enabling CFOs to fulfill strategic responsibilities by providing accurate and real-time financial data to stakeholders. It streamlines and accelerates the reconciliation process, reducing costs, optimizing resources, and enhancing financial governance. With transaction matching and exception management capabilities, the software eliminates manual tasks and empowers teams to focus on strategic activities. It offers a standardized and risk-based approach to managing various reconciliations, ensuring accuracy, workload reduction, and efficient control. The software’s audit trail feature guarantees compliance and traceability.

Benefits of using reconciliation software

A reconciliation solution provides a comprehensive platform that includes built-in libraries of financial tasks. Accountants can easily orchestrate their tasks and eliminate the need for IT intervention through the solution’s drag & drop functionality. The solution leverages automation tools such as RPA and workload automation to autonomously execute tasks using data from ERPs, data warehouses, and other business applications. Visible dashboards provide real-time monitoring of progress, tasks, activities, and bottlenecks, enabling prompt identification and remediation of performance gaps. With cloud-based storage, all relevant personnel can access, view, and modify the data, reducing the risk of data loss as each input is instantly backed up in the cloud.

Reconciliation software provides several strategic benefits:

1. Time-saving: Automated reconciliation significantly reduces the time required for the process. It quickly matches cash outgoings and receipts, reconciles bank accounts with accounting records, and verifies totals against balance sheets, cash flow statements, and income statements. Compared to manual spreadsheet checking, automated reconciliation is much faster and more efficient.
2. Error-free: By eliminating human error, automated reconciliation ensures accuracy. Human-driven reconciliation processes are prone to mistakes, such as overlooking sums or misreading figures. Automation brings algorithmic precision, promptly detecting any discrepancies and avoiding the need for time-consuming corrections.
3. Confidence in your accounts: Automated reconciliation instills confidence in the consistency and accuracy of your financial accounts. It swiftly rectifies any instances of funds being deposited into the wrong accounts and ensures that critical financial decisions are based on reliable information.
4. Fraud reduction: The speed and accuracy of automated reconciliation act as a deterrent against fraud. Any irregularities are quickly identified, allowing for immediate investigation and mitigating the potential damage of fraudulent activities.
5. Staff satisfaction: Automation relieves staff from laborious and repetitive manual reconciliation tasks. With automated systems, there is no need to navigate through folders of printouts or manually check multiple spreadsheets. This boosts staff satisfaction by freeing up time for more valuable tasks and reducing monotony.
6. Improved transparency: Automated reconciliation provides enhanced visibility and transparency throughout the process. Stakeholders can easily track progress towards the month-end close, eliminating the need for separate meetings or calls. This is particularly valuable for global operations or companies with multiple entities, as it provides a clear view of who is responsible for each task and offers visibility into every processed transaction within the finance department.

Top 10 best accounts reconciliation solutions

There are many accounts reconciliation tools available in the market, and while their specific functionalities may vary, most of them have robust reporting capabilities.  Key features of five popular Accounts Reconciliation Solutions are presented below.

1. Xero:

Xero is a cloud-based small business accounting software that caters to startups, growing companies, and established enterprises. While not a complete ERP system, it can be extended through third-party integrations for additional functionalities. Operating on a SaaS subscription model, Xero automates various bookkeeping and accounting tasks, offering features such as a chart of accounts, financial reporting, bank account reconciliation, cash flow management, bill capture, purchase orders, invoicing, inventory management, and more. Businesses can set up user roles with different levels of access and grant specific permissions for enhanced functionality.

Xero allows unlimited scalability in terms of users, but as a company grows, it may be necessary to consider mid-range ERP solutions like Sage Intacct, NetSuite, Microsoft Dynamics 365, or SAP’s ByDesign. Compatible with both Windows and Mac computers, Xero also offers a mobile app for Apple iOS and Google Android devices. It is popular among small businesses, business owners, bookkeepers, accounting firms, and non-profit organizations, with its Established plan providing multi-currency features for global customers.

Features:

• Cloud-based: Accessible from any device with an internet connection.
• Customizable experience with add-ons: Choice of a variety of applications to enhance functionality
• User-friendly: Compatible with both Windows and Mac operating systems, with customizable dashboards.
• Payroll processing: Capability of handling payroll tasks and providing employee access through the employee portal.
• Invoicing and quoting: Creation of professional invoices and quotes, customized templates, and accepting online payments.
• Multi-currency support: Management of payments, bills, invoices, and quotes in different currencies.
• Reporting capabilities: Generation of various reports to track business.
• Security measures: Two-step authentication, data encryption, secure data centers, and network security
• Online file storage: Store and manage files securely in the cloud, eliminating the need for physical documents.
• Simplified tax preparation: Accountants can log in to complete financials, streamlining the tax process.

Pros:

• Unlimited users with customizable permissions.
• Customizable reports and dashboards for actionable insights.
• User-friendly interface and easy navigation.
• Seamless bank feeds and import options.
• Detailed error tracking and user activity logs.

Cons:

• One-way phone support, limited direct assistance.
• Limits on invoices and bill payments in the entry-level plan.
• Lack of fiscal calendar customization.
• Absence of remittance information on checks.
• Limited integration with certain banks.

2. SolveXia

SolveXia is a no-code automation solution designed to optimize team productivity and automate financial close processes. Trusted by leading companies in the financial domain, SolveXia offers a secure platform that eliminates the need for multiple spreadsheet workbooks. Its features include automating Custody Reconciliations, calculating reinsurance and commission payments, and monitoring GDS Polling activities. With SolveXia’s comprehensive tools, users can efficiently manage data analytics, ensure top-notch security, and effectively share and manage critical processes.

Detailed audit trails contribute to risk reduction and compliance. The platform integrates data, applications, RPA tools, and AI services, providing end-to-end automation capabilities on a single platform. Industries spanning Financial Services, Travel, and Healthcare can benefit from SolveXia’s AI-powered technology. To facilitate exploration and decision-making, the company offers a free demo for users to experience the platform’s capabilities firsthand. SolveXia strives to enhance efficiency and streamline financial operations through its robust automation solutions.

Features:

• Cloud-based solution: Accessible from anywhere with an internet connection.
• Data Processing and Reporting: Robust data processing capabilities and comprehensive reporting functionalities
• No-code Automation: No-code automation solution, enabling users to automate processes without requiring coding skills
• Data Integration: Extraction of information from various sources such as general ledgers, banks, suppliers, and more, enabling efficient reconciliation of accounts.
• Integration of Data, Applications, RPA Tools, and AI Services: Integration of data, applications, robotic process automation (RPA) tools, and AI services into a single platform.
• Complex Data Matching: Capability to process data in any format and perform complex data matching.
• Exception Handling: Alerts and notifications for variances and exceptions and efficient workflow management to correct and adjust exceptions.
• Advanced Analytics: Integration of more comprehensive data, allowing for advanced analytics beyond general ledger or bank data. This includes overlap with rebates and commission calculations or the creation of management dashboards.

Pros:

• Excellent support services
• Scalability
• User-friendly system design
• Mixture of Access and Excel

Cons:

• Troubleshooting difficulties
• Functionality loss after upgrading
• Lack of intuitiveness in Excel version
• Replication issues with Solver
• Excel skills required for Process Designer
• License restrictions and team absence

3. Blackline

BlackLine is a cloud-based software platform that automates and streamlines the financial close processes for businesses. It simplifies the manual work involved in reconciling accounts and preparing financial statements, often performed using complex Excel spreadsheets. By automating these tasks, BlackLine reduces the risk of errors and significantly improves efficiency. This automation saves businesses valuable time and resources during the financial close process. Additionally,
BlackLine provides visibility and control over the entire process, allowing businesses to track progress, collaborate with teams, and ensure compliance with accounting standards and regulations. With its cloud-based technology, BlackLine revolutionizes the financial close, enhancing accuracy, efficiency, and compliance. Through its comprehensive automation capabilities, BlackLine empowers businesses to optimize their financial operations, streamline processes, and achieve greater productivity in their financial close activities.

Features:

• Cloud-based solution: Accessible from anywhere with an internet connection.
• Account reconciliation: Streamlined reconciliation process for medium to large-sized Businesses.
• Transaction matching: Automated matching of transactions for efficient processing.
• Journal entry management: Capability to record, monitor, and post entries in the general ledger.
• Intercompany processing: Facilitates reconciliation and transactions across multiple entities within the organization.
• Approval workflows: Capability to set up customized approval processes to ensure accuracy and compliance.
• Open item tracking: Monitoring of outstanding items and ensuring timely resolution.
• Audit trails: Maintaining a detailed record of activities for compliance and auditing purposes.
• Regulatory compliance: Adherence to industry regulations and standards.
• Integration with third-party platforms: Seamless integration with popular accounting and ERP systems.
• Custom reports: Generation of reports tailored to specific business needs.
• Mobile application: Access and management of the accounting processes on the go using iOS and Android devices.

Pros:

• Excellent platform for storing financial information.
• User-friendly interface with easy navigation.
• Dashboard provides a snapshot of team tasks and reconciliations.
• Customizable Compliance platform templates.
• Helpful to-do list for task tracking and approval.
• Prompt customer support.
• Account grouping feature for a holistic view of accounts.
• Assists with account reconciliations, tasks, variance analysis, and journal entries.

Cons:

• Initial difficulty navigating the platform for first-time users.
• Steep learning curve due to extensive functionality.
• Need to re-select time period for each search.
• Vagueness of menu labels.
• Overly complicated search function.
• Short logout time after periods of inactivity.

4. ReconArt

ReconArt is an enterprise-class, fully web-based solution designed to automate and manage all data reconciliation processes from start to finish. With its powerful matching engine, ReconArt efficiently processes large volumes of data in various file formats, making it a best-practice SaaS solution. The integrated functionality of ReconArt supports every aspect of the reconciliation lifecycle, including file import, data enrichment, rule-based transaction matching, exception classification, task management, and approval workflows. It accommodates a wide range of financial reconciliations, such as bank statements, merchant/credit cards, online payments, payables and receivables, general ledger to sub-ledger, intercompany, and more.
Additionally, ReconArt offers comprehensive features for smart financial close management, including balance sheet reconciliation, account certification, period-end task management, enhanced control of journals, and variance analysis. By automating critical activities in the reconciliation process, such as data import, matching, exception handling, and collaboration, ReconArt empowers finance teams to eliminate manual tasks, optimize accounting processes, and ensure robust internal controls and regulatory compliance. With its scalability, flexibility, and user-friendly interface, ReconArt provides a powerful reconciliation solution for businesses of all sizes.

Features:

• Web-Based Solution: Largely web-based, allowing users to access the software from anywhere with an internet connection.
• On-Site Hosting Option: Hosted on-site if desired, providing flexibility in deployment.
• Reconciliation Capabilities: Bank reconciliation, credit card reconciliation, balance sheet reconciliation, financial close, accounts reconciliation, variance analysis, journal entry, and intercompany reconciliation.
• Scalable Pricing: Variable pricing model starting at a minimum of five users, with packages beginning at $1,500 per month.
• Integrated Platform: Streamlined process on one integrated platform, eliminating the need for multiple tools or systems.
• Reporting Visibility: Users can track and analyze reconciliation data for improved operational efficiency.
• Control and Audit Trail: Multi-level control and a granular audit trail, ensuring transparency and compliance.
• Risk Identification: Timely identification of risk situations, helping businesses proactively address potential issues.
• Third-Party Integration: Integration with third-party systems, facilitating data exchange and automation.

Pros:

• Rule-based automation for ongoing transactions.
• Automation of complex reconciliations.
• Easy transfer and import of data from different sources.
• Time-saving through rule setup for ongoing transactions.

Cons:

• Slow implementation of matching rules.
• Difficulty in retrieving uploaded data for error correction or reversal.

5. OneStream

OneStream is a Performance Management solution offering various functionalities to support complex financial consolidation, budgeting, forecasting, financial reporting, and data quality management. It stands out from its competitors through its Marketplace feature, which allows users to download additional solutions for specific requirements such as Capex Planning, Lease Accounting, and Tax Provisioning without the need for additional licenses or complicated integration processes.
OneStream’s cloud platform provides a unified approach to financial consolidation, reporting, planning, and analytics, catering to the needs of dynamic enterprises. The platform can be extended with domain-specific MarketPlace solutions, enabling customers to tackle their business challenges from the start. With its comprehensive suite of tools and simplified integration process, OneStream has become a popular choice for organizations seeking an efficient and robust solution for their performance management needs.

Features:

• Cloud-based solution: Accessible from anywhere with an internet connection
• Transaction Matching: Users can easily verify financial data by matching it against internal records, with support for importing and splitting bank data.
• Financial Close and Consolidation: OneStream simplifies the complex process of financial close and consolidation, eliminating the need for manual spreadsheets.
• Data Quality: The platform ensures data accuracy and integrity, improving the reliability of financial records.
• Audit Trail: OneStream maintains an audit trail, allowing users to track changes and ensure compliance.
• Financial Reporting: Users can generate comprehensive financial reports, including income statements, balance sheets, and profit/loss statements.
• Data Visualization: OneStream provides visually appealing graphs, charts, and grids to present financial information.
• Real-Time Data: Users can access and analyze real-time financial data for up-to-date reporting and decision-making.
• Multi-Company Support: OneStream accommodates multiple companies, enabling centralized reconciliation and reporting across entities.
• Ad hoc Reporting: Users can generate ad hoc reports on-demand, providing flexibility in analyzing and reporting financial information.

Pros:

• Data export capability with third-party tools
• Good controls and audit trails
• User-friendly interface
• Efficient management of metadata
• Access to multiple products for various needs (e.g., capital planning, forecasting, consolidations)
• Easy budgeting and forecasting with predictive analytics

Cons:

• The learning curve associated with understanding the dashboard

6. ZarMoney

ZarMoney is a cloud-based software that ensures that all incoming and outgoing costs are promptly reflected in the system, keeping records consistently up to date. ZarMoney simplifies the task of importing bank transactions by providing automated systems that seamlessly integrate with users’ dashboards, facilitating easy editing and approval. With compatibility spanning over 9,600 financial institutions in the US and Canada, users can confidently import records without encountering significant obstacles.

By effortlessly identifying discrepancies, duplications, and missing entries, ZarMoney plays a crucial role in maintaining accurately reconciled books, sparing users the frustration of manual reconciliation. Additionally, the software offers users real-time insights into their cash position, empowering them to make well-informed decisions in a timely manner.

Features:

• 1099 preparation: Simplify the process of preparing and filing 1099 forms for independent contractors and vendors.
• Accounts receivable transactions: Efficiently manage and track customer payments and outstanding balances.
• Accounts payable transactions: Streamline and organize vendor payments and maintain accurate records.
• Online payment processing: Accept online payments securely and conveniently from customers.
• Aging tracking: Monitor and analyze the age of outstanding invoices to improve cash flow management.
• Approval process control: Implement controlled workflows for transaction approvals, ensuring accuracy and compliance.
• Bank reconciliation: Automatically reconcile bank statements with accounting records for precise financial tracking.
• Billing and invoicing: Generate professional invoices and manage billing cycles efficiently.
• Cash management: Effectively monitor and control cash inflows and outflows for better financial management.
• Check processing: Automate the processing of checks for quick and accurate payments.
• Chart of accounts: Create and manage a comprehensive list of accounts for systematic financial tracking.
• Funds transfer and multi-login support: Easily transfer funds between accounts and enable multiple users to access the software with individual logins.
• Integration with AutoEntry, PayPal, Stripe, Google Calendar, QuickBooks Payment, Braintree, CyberSource, Authorize.Net, Gusto, Mailchimp, Zapier, and Shopify for enhanced functionality and efficient business operations.

Pros:

• User-friendly interface for easy navigation
• Scalability to upgrade to advanced plans and unlock additional features.
• Detailed financial reports

Cons:

• No free plan to test and try

7. Upflow

UpFlow is a comprehensive accounting solution for account reconciliation that provides flexible payment options to customers and allows tracking of incoming bills. The software incorporates a reminder and alert system to promptly notify clients about overdue invoices, reducing payment delays. UpFlow enables users to reconcile bank accounts with a single click, optimizing workflow and cash flow management.

Additionally, the intuitive reminder system enhances customer relationship management, resulting in improved on-time payments and reduced overpayments. UpFlow also supports integration with external systems, facilitating expanded functionality and upgraded billing systems for enhanced efficiency.

Features:

• ACH payment processing: Process electronic payments seamlessly through the Automated Clearing House network for convenient and efficient transactions.
• Automated notices: Set up automatic notifications and reminders to keep customers informed about payment due dates and important updates.
• Billing & Invoicing: Generate professional invoices and manage billing cycles effectively, ensuring accurate and timely payments.
• Customer statements: Provide detailed statements to customers, offering a clear overview of their transactions and balances.
• Data security: Ensure the safety and protection of sensitive financial data with robust security measures and encryption protocols.
• Debit/credit card processing: Accept payments securely through debit and credit cards, expanding payment options for customers.
• In-house collections: Manage collections internally with tools and features that facilitate efficient follow-ups and payment recovery.
• Invoice management: Organize and track invoices efficiently, simplifying the process of managing and reconciling payments.
• Mobile payments: Accept payments on the go with mobile payment capabilities, allowing for flexibility and convenience.
• Online payments: Enable customers to make payments conveniently through online portals or payment gateways, facilitating seamless transactions.

Pros:

• Time-efficient implementation
• Web browser compatibility.
• Affordable rate with good functionality.

Cons:

• Limited third-party integrations: Integrates only with QuickBooks, Xero, NetSuite, Stripe, and Chargebee
• Limited customization options

8. Oracle NetSuite

Oracle NetSuite is a cloud-based accounting software that provides a wide range of financial management features, including accounts reconciliation and invoicing. With its intuitive interface and comprehensive functionality, NetSuite enables users to reconcile accounts efficiently and quickly. The software offers a real-time view of financial data, allowing for automated account reconciliations and a streamlined end-to-end process.

Moreover, NetSuite grants auditors access to historical records of past reconciliations, eliminating manual processes and reducing the potential for errors. Users can leverage the software to analyze data trends, identify potential risks or areas of fraud, and take proactive measures to address them, ensuring enhanced financial control and security.

Features:

• Centralized financial management: Users can conveniently manage their finances from a single, centralized platform.
• Customizable financial reports: The software enables businesses to generate tailored financial reports for effective tracking of financial performance.
• Multi-currency capabilities: Businesses can operate in multiple currencies and maintain precise financial records across different currency conversions.
• Automated account reconciliation: The software automates the process of reconciling accounts, eliminating the need for manual reconciliation efforts.
• Advanced analytics: Users can leverage advanced analytics tools to gain deeper insights into their financial performance and make informed decisions.

Pros:

• Robust
• Ideal for global business
• Reporting & Analytics
• Custom process workflows
• Easily navigable
• Feature-rich
• Secure cloud service

Cons:

• High price
• Additional costs like premium customer support and training
• Big learning curve
• Long implementation process
• Broad but complex features
• Not always helpful customer support

9. Sage Intact

Sage Intacct is a cloud-based financial management software designed to streamline accounting and financial processes for businesses. With features like invoice approvals, automated bank feeds, and revenue recognition, Sage Intacct helps automate crucial financial tasks. Moreover, the software integrates seamlessly with CRM, HR, and eCommerce platforms, enabling businesses to efficiently manage their finances across different departments.

A standout feature of Sage Intacct is its robust account reconciliation capability, allowing users to compare bank statements, track balances across ledgers, and effectively manage their financial data. Additionally, the software provides a built-in financial dashboard, providing real-time visibility into accounts and empowering users with up-to-date financial insights.

Features:

• Automated account reconciliations: Automated tools to match and compare transactions, reducing the need for manual effort and minimizing the risk of errors.
• Customizable workflows: Configurable workflows according to the business’s unique processes and optimize efficiency.
• Robust reporting capabilities: Detailed and comprehensive information, enabling informed decisions and performance tracking.
• 24/7 customer support
• Security features: Robust security measures that safeguard against unauthorized access and potential breaches, ensuring the confidentiality and privacy of financial information.

Pros

• Ease of use for both financial and non-financial teams
• Unique shared chart of accounts that reduces the total number of accounts to a more manageable amount
• Cloud platform providing 24/7 access to financials
• Hands-off upgrades released each quarter
• Comprehensive reporting and dashboards
• Robust flexibility and integration options with Sage Intacct’s open, public API
• Availability of support, education, and training

Cons:

• Lack of operational functionality compared to suite software
• Higher price compared to small business software
• Unfamiliar and unique processes due to GAAP compliance regulations
• Unintuitive aspects in reporting
• The complicated process of making changes to implementation configurations
• The disparity in the quality of support from different resellers and implementation partners

Automated reconciliation with Nanonets

The account reconciliation process can be greatly simplified and streamlined through the use of Nanonets, an AI-powered solution. Nanonets automates various steps, reduces manual effort, and increases efficiency, all of which make it an invaluable tool for accounting staff. By integrating data from multiple financial sources such as ERP systems, bank statements, credit card processors, and merchant services, Nanonets simplifies the reconciliation tasks.

One of the key features of Nanonets is its workflow automation capabilities, which allow for easy and seamless document upload to their OCR models. This eliminates the need for manual collection and organization of documents as users can directly feed bank statements, cash registers, and proof of payments to Nanonets through various integration options.

Nanonets employs advanced technologies like document classification and OCR to extract relevant data from uploaded documents accurately and efficiently. This extracted information is then utilized in rule-based workflows to facilitate seamless data matching across different sources. The automation capabilities of Nanonets significantly reduce the time and effort required for manual comparison, flagging non-matching entries for review and prompt resolution.

The collaborative nature of Nanonets is further enhanced through its document annotation feature, allowing reviewers to add comments and suggestions directly to the document. This streamlined communication reduces the likelihood of errors in the final file, ensuring a thorough and accurate reconciliation process.

Once the reconciliation is finalized and approved, Nanonets facilitates the automatic updating of matching entries in the ERP or accounting software. Alternatively, users can export the reconciled data to their preferred database or Google Sheets for further analysis and reporting. This seamless integration ensures that the reconciled data is accurately reflected in the financial records without the need for manual intervention.

Nanonets offers additional features such as automated review and approval workflows, customizable reconciliation templates and checklists, integrated storage of supporting documentation, and direct links to relevant policies and procedures. These features contribute to the proper segregation of duties, standardized processes, easy access to supporting documentation, and a convenient reference for accountants during the reconciliation process.

By leveraging Nanonets for account reconciliation, businesses can optimize their financial close process, improve accuracy, reduce the risk of errors, and enhance overall financial reporting and decision-making.

Take away

Reconciliation software has become an indispensable tool for businesses in recent years. Its ability to automate and streamline the reconciliation process saves valuable time and mitigates the risk of errors inherent in manual methods. By providing an accurate and efficient means of matching data from various sources, reconciliation software enhances the accuracy and reliability of financial reports.

Additionally, the software’s audit trail functionality promotes transparency and accountability, allowing organizations to confidently comply with regulatory requirements and internal controls. With the increasing complexity of financial operations, incorporating reconciliation software into the reporting workflow is not just a luxury but a necessity for businesses seeking to optimize their financial processes, reduce risks, and make informed decisions based on accurate and reliable financial data.

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• Source: https://nanonets.com/blog/best-reconciliation-software/