How to speed up bank reconciliation in your company

4 min reading
How to speed up bank reconciliation in your company
How to speed up bank reconciliation in your company


Companies are increasingly demanding bank reconciliation tools as they look to correct errors in their accounting. Banking standards such as statement 43 (AEB43) and application programming interfaces such as BBVA API_Market’s API Business Accounts make it easier to locate and correct inconsistencies through enterprise resource planning (ERP) systems.

This approach enables companies to operate more securely and reliably, as their accounts and records are updated with real data. Business Accounts automatically integrates BBVA account statements in AEB43 format into the company’s systems, providing a much simpler, faster and more direct access route.

What is bank reconciliation?

Bank reconciliation, also known as account reconciliation, is a process that seeks to match and reconcile the amounts a company records in an account with its bank movements. At the same time, it seeks to classify the auxiliary ledger to match and reconcile it with the statement.

In other words, it aims to make several different registration systems compatible, so that they all reflect the same information. In plainer language, it seeks to balance them with each other. The goal of reconciliation is not only to locate discrepancies, but also to correct them, either manually (a technique that has largely disappeared, especially in large companies) or through tools that automate the process.

This is the case with API Business Accounts, which enables the downloading of AEB 43-standard files for BBVA accounts so that the ERP system can compare the data. This keeps cash flow up-to-date, error-free and more efficient, while facilitating business decision-making by facilitating more reliable information that is always up to date.

Objectives of banking reconciliation

Although management systems have many accounting goals and benefits, bank reconciliation has four major objectives. The following list is not in order of importance for every organization, as these advantages are all of different natures:

Reconciling bank accounts also has other, more specific benefits, some of which are very indirect, such as being a more reliable company for suppliers because of more reliable accounting being available.

What is the relationship between ERP systems and bank reconciliation?

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Enterprise resource planning (ERP) systems are management tools that integrate a suite of business information systems. They are the natural development of dashboards, enabling companies to make decisions based on reliable data of all kinds, including banking data

ERP systems are usually modular, drawing on centralized databases or connected through instances, and incorporate the functions needed by the company or for which information is available. For example, a company might draw on its CRM (Customer Relationship Management) and bank reconciliation in its ERP system, but not inventory management.

Services such as Business Accounts facilitate the download of the AEB 43 statement into the ERP dashboard, enabling the actual balances at the end of the day, the week or the month to be reflected in a single platform. This type of digital integration is becoming increasingly common, especially in large companies.

What inconsistencies can bank reconciliation detect?

Duplicate entries are very common in accounting, due to both computer and human error. In this case, the mismatches match the duplicated amount exactly and are easy to correct. Similarly, some entries are overlooked and never entered, in which case the mismatch is again equal to the missing entry.

A common inconsistency that is somewhat more difficult to detect is errors in the location of commas and decimal points (depending on the system used). This error displaces units, tens and decimals and is more difficult to correct. For example, if a store sells an item for 95.90 euros but it is booked at 9.59 euros, the difference is 86.31 euros.

When figures are entered manually, similar numbers are sometimes misplaced. Thus, instead of booking 95.90 euros, 99.50 euros might be entered, with a mismatch of 3.60 euros.

There are also other errors, such as mismatches due to external causes. Until recently, it was common to find errors due to format changes and lack of standardization in processes. This resulted in issues such as entries being posted in different categories and missing decimal points.

Bank reconciliation process

There is a specific procedure for locating each of these errors, although this has been taken care of by ‘machines’ for some time. In general, there are two main areas of work, which occur consecutively:

Traditionally, bank reconciliation was an annual or quarterly procedure, although tools are now available that keep the accounts always up to date. This frequency is determined by the frequency with which it is possible to download information on the account from the bank: the previous statement, payments and collections, charges and debit notes, and the balance in favor.

More innovative systems, such as APIs, allow users to download statement 43 information to crosscheck with the information in the company’s ERP system, enabling custom developments. The Business Accounts API automates the downloading of information based on the company’s needs.

It can check the information in real time, without waiting, whenever the company needs it, based on the characteristics of each business. As we have seen, this results in more agile and effective management that is always up to date.

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