For an Accounts Receivable (AR) executive, the daily grind often revolves around one critical task: payment reconciliation. This process is crucial for maintaining the financial health of an organization, ensuring that every transaction is accounted for and every discrepancy is addressed. However, the journey of performing payment reconciliation is fraught with challenges, especially when dealing with multiple payment channels and third-party platforms. Here’s a glimpse into the life of an AR executive and the intricacies of their daily routine.
Morning: Starting the Day with Data Collection
8:00 AM - Logging In and Preparing Reports The day begins early for an AR executive. Logging into various systems and platforms is the first task of the day. This includes accessing the point-of-sale (POS) systems, third-party delivery platforms like Uber Eats and DoorDash, and the company’s internal accounting software. Each platform generates its own set of reports, which need to be downloaded and saved meticulously.
9:00 AM - Data Download and Compilation With a cup of coffee in hand, the next step is to download the necessary reports. This involves pulling data from different sources, including sales reports, bank statements, and payment processor records. The executive meticulously compiles this data into spreadsheets, often juggling multiple files and ensuring that no transaction is overlooked.
Mid-Morning: Manual Data Entry and Initial Reconciliation
10:00 AM - Copying and Pasting Data Once all the reports are compiled, the AR executive begins the laborious task of manual data entry. This involves copying and pasting transaction details from various reports into a master reconciliation spreadsheet. Each entry needs to be precise, as any error could lead to discrepancies that are hard to trace later.
11:00 AM - Initial Reconciliation With the data entered, the initial reconciliation process begins. The AR executive compares the sales data from the POS system and third-party platforms with the bank deposits. This involves matching each transaction, ensuring that the amounts and dates align correctly. Any mismatches are noted for further investigation.
Afternoon: Identifying and Resolving Discrepancies
12:00 PM - Lunch Break After a busy morning of data entry and initial reconciliation, a much-needed lunch break provides a brief respite.
1:00 PM - Discrepancy Investigation Post-lunch, the AR executive dives into the more challenging part of their job: identifying and resolving discrepancies. This could involve various scenarios such as missing transactions, incorrect charges, or discrepancies arising from marketing fees, disputes, and refunds. Each discrepancy is investigated thoroughly, often requiring cross-referencing multiple reports and contacting third-party platforms for clarification.
3:00 PM - Adjusting Entries and Updating Records Once discrepancies are identified, the AR executive makes the necessary adjustments. This includes correcting entries in the reconciliation spreadsheet, updating the accounting system, and ensuring that all records are accurate and up-to-date. This process is crucial for maintaining financial accuracy and integrity.
Late Afternoon: Preparing Reports and Planning Ahead
4:00 PM - Preparing Summary Reports As the day winds down, the AR executive prepares summary reports for management. These reports provide an overview of the reconciliation status, highlighting any unresolved discrepancies and significant findings. These reports are essential for informed decision-making and financial planning.
5:00 PM - Planning for the Next Day Before clocking out, the AR executive reviews the tasks completed and plans for the next day. This includes setting priorities for unresolved issues, scheduling follow-ups with third-party platforms, and ensuring that all necessary data is ready for the next day’s reconciliation process.
The Challenges Faced by AR Executives
The life of an AR executive is filled with challenges that can make payment reconciliation a daunting task:
1. High Volume of Transactions: Managing and reconciling a large number of transactions daily can be overwhelming. 2. Inconsistent Data Formats: Different platforms provide data in various formats, requiring additional effort to standardize. 3. Manual Data Entry: The risk of human error in manual data entry is high, leading to potential discrepancies. 4. Complex Discrepancies: Resolving discrepancies involving marketing fees, disputes, and refunds can be time-consuming. 5. Time-Consuming Processes: The entire process, from data collection to discrepancy resolution, is labor-intensive and time-consuming.
The Solution: Embracing Automation
To alleviate these challenges, many businesses are turning to automation. Automated payment reconciliation systems can significantly streamline the process, offering numerous benefits:
• Efficiency and Time Savings: Automation speeds up data collection, entry, and reconciliation, freeing up valuable time for AR executives. • Error Reduction: Automated systems minimize human error, ensuring greater accuracy in financial records. • Real-Time Data: Access to real-time data helps in promptly identifying and resolving discrepancies. • Enhanced Financial Accuracy: With precise reconciliation, businesses can maintain accurate financial statements, aiding better decision-making.
The life of an Accounts Receivable executive performing payment reconciliation is demanding and intricate, involving meticulous attention to detail and a thorough understanding of various systems and platforms. While the challenges are significant, embracing automation can transform this process, enhancing efficiency, accuracy, and overall financial health.
Ready to streamline your payment reconciliation process? Explore how ThinkVAL’s automated solutions can help elevate your financial operations and ease the workload of your AR team. Contact us for a free demo today