It’s no one’s favorite job, but accounts need to be reconciled, and Finance has to do it.
But are you doing it as efficiently as you could be? And how do your team’s practices compare to your peers?
New data can tell you. The 6th annual Benchmarking the Accounting & Finance Function 2015 from Robert Half and Financial Executives International offers plenty of yardsticks to help you gauge where your current reconciliation stacks up.
Take a look at three key benchmarks out of the survey.
Benchmark 1: Number of active accounts in the general ledger
Hope you have a current and concise chart of accounts! Because the general ledger is not easy to manage.
When it comes to active accounts in the general ledger, your peers are juggling a lot. Almost two-thirds (63%) of U.S. companies have 100–500 active accounts now, while another 30% have between 501 and 3,000.
That’s a lot to manage. And experts say those numbers are only going to grow, as business becomes increasingly complex.
The key to keeping things under control is the way you manage your chart of accounts.
The folks at Accountingtools.com suggest a few best practices:
- Be consistent. Whether you go with a 3-digit, 5-digit or 7-digit format, it’s critical to be consistent. The goal is to set up accounts so they won’t need to be changed anytime soon.
- Resist change. That being said, try to forbid other departments from making changes to the chart of accounts. That will wreak havoc with your process.
- Pare down where you can. Just because you want your chart of accounts to remain relatively stable, that doesn’t mean you and your team shouldn’t look for opportunities to get rid of little-used accounts.
Benchmark 2: Number of accounts reconciled at least quarterly
Of course those accounts can’t just sit there – somebody has to reconcile them! And most companies do so quarterly. Just how many are they taking on every three months?
The majority (83%) reconcile 100–500 at least quarterly. Another 10% reconcile 501-1,000 accounts, while 4% reconcile 1,001–3,000 at least once a quarter. A few companies take the task on for more than 10,000 accounts.
No matter how many accounts your staffers are charged with reconciling, make sure to embrace this best practice. Don’t save it all for the end of the period. If staffers are starting at square 1 at every quarter end, it will feel like an insurmountable task. Instead, set timelines so the work is spread out.
Benchmark 3: The tool used to reconcile accounts
No matter how many accounts your team reconciles, how are you reconciling them?
Most of your peers still can’t get the manual out of their reconciliation process: 54% said they don’t use any tools at the moment. Nearly a quarter (23%) rely on a third-party software to get the job done, while 22% use a tool they’ve developed internally.
The more of the time-consuming manual processes you can eliminate, the freer you and your staffers will be for more strategic analysis of that data. So it’s well worth exploring your automation options.
Info: To download the complete report, click roberthalf.com/sites/default/files/Media_Root/images/rh-pdfs/atfamr_0515_iapdf_benchmarking_nam_eng_050815.pdf
