Automating Financial Data Reconciliation to Reduce Closing Time

Automating Financial Data Reconciliation to Reduce Closing Time

“BPM International notes that 72 % of all companies surveyed spend significant time clearing intercompany differences, and 31 % of survey participants identified the process as significant barriers to their close”.

Business Challenge:

Our client, is a large equipment finance company in the United States offering retail, wholesale and lease financing options to help facilitate the sale of its equipment. The company also offers revolving credit and operating loans to farmers. The financing division manages more than 2 million accounts and a portfolio of over $20 billion.
One of their biggest challenges was that there was no existing standard process to reconcile the data. It was like a treasure hunt to figure out the reason for imbalances. This led to more time consuming, non-value added, boring tasks to be repeated for every month end closing.
The amount of time used to close the monthly statements of course depends on the systems in place and the quality of procedures followed during the entire process of CAPTURING and PROCESSING each and every business process. There were around 10-12 business process transactions which needed to be reconciled.
This was manual spreadsheet work and with the possibility to introduce errors. This is normally 2-3 days of work for 2 users for each business process.

TekLink’s Solution:

With out client we reviewed SAP’s Reconciliation Hub. Designed to reduce the differences in corporate group consolidation, this application in Financial Accounting allows early analysis in the closing process to avoid differences altogether and to reduce the deadline pressure that normally arises during the end of a closing period.
However we found out that this solution is available only as part of the SAP Bank Analyzer System. The limitation of this solution is that it will only reconcile quantitative data and not the qualitative data. For each business process, different data models in BW system would need to be defined. With our client it was found that this solution would not be scalable.

To resolve this situation, TekLink defined and developed a custom solution for Data Reconciliation. The TekLink custom solution reconciles qualitative and quantitative data. This is a scalable solution and will work for any sender and any receiver data, making it a generic solution. And a win for our clients!

The solution was developed on SAP BW on HANA. But it can be extended to SAP BW (non-HANA) and also Enterprise HANA, depending on the client landscape.

Value to the business: No Scramble, No Hassle

The main benefits of TekLink’s custom solution for Data Reconciliation are a measurable and substantial reduction of the closing time for both, local and group accounting. The solution also enables:

  • Financial and operational visibility across business entities.
  • Controlled and collaboration across business entities.
  • Proactive error reporting and recommendations on resolving issues.
  • Increased employee productivity and accountability.

 

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