What are The Advantages of Outsourcing Bank Reconciliation Services?
Outsourcing bank reconciliation services allow you to find out the disparity between a balance amount displayed in an enterprise’s bank statement, as provided by a bank and the corresponding amount displayed in an enterprise’s own accounting data at a particular point in time.
Reconciliation is done by cross-checking all the transaction of the bank and the firm’s own account record. However, it is an extremely exhausting and time-consuming task, it is best to outsource it from a Bank reconciliation service provider.
Some of the most common mistakes that occur while performing Bank reconciling are a cheque(s) issued by a firm not being submitted to a bank, disparities in bank transactions such as credit amount received or additional charges imposed by the bank not being documented in a firm’s accounting records and so on. To rise above or resolve such mistakes, firms need to outsource bank reconciliation services from a specialist who can take care of their reconciliation requirements. They are capable of doing the essential changes in the account records and the disparities are documented, to help an enterprise for upcoming bank reconciliations.
Bank reconciliation outsourcing services help in reassessing a firm’s bank balance as per their own record entries and balance statements issued by banks. This service also helps in correcting entries that create a disparity between the two amounts. Timely reconciliations let firms to identify and put an end to intentional fraud and find errors made by bank employees, representatives, accountants, and management team.
So, let’s look at the benefits of outsourcing bank reconciliation services:
Detects Fraudulent Activities
With bank reconciliation outsourcing services, an enterprise is able to match its distributed cheques with the amount entered in bank statements. Their watchful re-evaluation based on proper sheets and procedures help to reveal fraudulent activities such as a payment transferred to illegal businesses, payments made to illegitimate employees or vendors and unrevised sanctioned cheque amounts and details.
Bank staff can make accounting mistakes such as transferring incorrect amount, record incorrect cheque amount, enter the amount in an incorrect bank account, enter a duplicate transaction or eliminate an entry from an enterprise’s bank statement. Outsourcing Bank account reconciling enables firms to report the errors to the bank, allowing them to find the disparity and correct the blunder.
The on-hold time between payments made to employees and vendors as well as payments received from customers can vary significantly. This mainly affects an enterprise with extremely low cash stock. Outsourcing bank reconciliations on a regular basis help enterprises administer or delay payments that may protect them from bounced checks, business overdrafts, extra interests and insufficient funds.
Bank reconciliation outsourcing allows enterprises to manage their accounts collection better. When a patron’s payment gets cleared from a bank, there is no outstanding payable amount and therefore, doesn’t need any advanced action. However, if a customer’s payment cheque doesn’t clear, the management gets alerted to be more focused on their collection method.
In order to utilize bank reconciliation as an effective technique of safeguarding an enterprise’s cash reserves from in-house fraudulent activities, it is wise to outsource professional bank reconciliation services.