Bank reconciliations are among the most time-consuming and laborious manual tasks facing many of our real estate clients.
At the recent MRI Ascend conference in New Orleans, Jason Schedler and Faraz Memon discussed how our automation offering can help clients save time, save money, and make their entire operation more efficient.
The Problem With Manual Bank Recs
Each time our clients need to do a bank reconciliation, they must pull the relevant information from their accounting software tool and their bank statements. Because many clients use different bank accounts for each entity they manage, this process can involve juggling many different bank statements.
In many cases, they will drop this data into Excel and go through a manual process of normalizing, sorting, and filtering to match up the information on the bank statements with the information in their MRI software system.
At this stage, they need to gather ending balances, manually open a bank rec for each account, and reconcile each transaction against those listed on the spreadsheets. For large organizations, this can mean repeating the process hundreds of times.
All of this adds up to an enormous amount of time. Our clients have told us they spend up to 200 hours on bank reconciliation each month—occasionally, even more—depending on the volume of bank accounts and transactions. In some cases, bank reconciliation delivery times can be measured in weeks, holding up other business activities and obscuring the organization’s true cash position.
The Solution: Automated Bank Recs
We recognized that this manual process was becoming unsustainable for many of our clients, causing knock-on problems across their businesses. As a result, we leveraged our knowledge of various automation tools, including database customization, MRI customization, and robotic process automation (RPA), to create a simple system for automating the bank rec process.
Here’s how it works: The client schedules a time with us, and we let our virtual bank rec bot (known as “Rosie”) get to work. When Rosie has finished working, she notifies the client that the work is complete. The client receives a full reconciliation report packet, including all the necessary information. This helps them finalize any remaining transactions.
Our bot typically offers 80%-100% completion of this work, with percentages increasing as more recs are completed for each client. As you can see from the numbers we shared above, this can save clients a lot of time and free up their staff for those tasks that require a human touch.
Automated Bank Recs: How It Works
When Rosie is assigned to work on a client’s bank reconciliation, she begins by downloading all the relevant bank statements. The client can also send these directly, if they prefer. Rosie then goes into MRI Property Management X and pulls the reports needed to complete the reconciliation.
She feeds this data into REdirect’s Matching Service, then takes the information from this and reconciles each transaction within MRI. Finally, a reporting email is sent to notify the client of completion.
What is REdirect’s Matching Service?
Our Matching Service performs four key tasks:
- Matching checks: matching items that share a check number, account number, amount, and transaction date.
- Duplicate transactions: seeking out and reconciling transactions that have multiple entries using a first-in, first-out basis.
- One-to-one transactions: the simplest step, identifying and reconciling transactions that are a clear match.
- Bundled transactions: the most complex task, identifying transactions that have been bundled on one side and separated on the other (such as payroll) and using a rules-based framework to reconcile them.
What Does the Reporting Email Contain?
We are continually adding to and enhancing the reporting email our clients receive at the end of this process. At present, it consists of four key parts:
- Original bank data, normalized and sorted
- Original MRI data showing which transactions were in MRI
- An analysis of the matching that has taken place for each bank account
- A detailed list of reconciled transactions with a full mapping of how those transactions were reconciled
How Can Automated Bank Recs Work for You?
If you are interested in learning more about automating your bank reconciliation process, we would love to hear from you for an exploratory conversation about how we can help.
If you would like to learn more about anything we have discussed in today’s post or anything else we might be able to support you with, please get in touch today.