What is Oracle Account Reconciliation Cloud Service
Oracle Account Reconciliation Cloud Service (ARCS) is a purpose-built solution in the cloud for managing the global reconciliation process. It provides real-time visibility into the performance of reconciliations and ensures that all reconciliations prepared are properly qualified. It also helps companies streamline and optimize performance by automating certain reconciliation tasks and supporting risk-based reconciliation cycles.
Modern finance teams face constant pressures to improve productivity and lower costs. Ensuring that your financial processes are running smoothly and maintaining accurate data is essential, which is why account reconciliation plays a key role in running an efficient finance department. Account reconciliation often involves comparing accounts payable invoices with bank statements to confirm that they match. This is usually a slow, time-consuming process if done manually, and can result in many errors and inaccurate data.
Why Effective Account Reconciliation Matters
Effective account reconciliation can help you identify potential risks such as late payments and eliminate any gaps in your finance processes. Account reconciliation helps you to quickly identify any unusual activities and exceptions, such as pending receivables or any deviation or discrepancies in your books, and achieve a faster financial close. Without effective reconciliation, it’s difficult to detect fraud and spot any potential disruptions to your cash flow.
Effective account reconciliation helps you to improve financial planning and forecasting by identifying key trends and patterns in your data. For example, if your reconciliation processes identify a client that’s missing payments or making late payments, you can either take corrective action to address this issue or adjust your forecasts accordingly.
Challenges Oracle ARCS Help You Overcome
Slow Processes
Demands on finance and accounting departments to deliver more with fewer resources, faster, creating more stress. Account reconciliation is still often regarded as a time-consuming, resource-intensive activity – especially if you still rely on manual labor and solutions such as spreadsheets to complete it. This can lead to a range of challenges that you’ll need to tackle in order to make these processes work as effectively as possible. Oracle Account Reconciliation Cloud Service helps you improve the speed without compromising on the efficiency by automating some of the repetitive and time taking tasks.
Lack of a Global Process
Global account reconciliation processes potentially involve hundreds or thousands of reconciliations across different business units in different locations. The lack of a global system makes the process manual, effort-intensive, and time-consuming. Adopting an automated, global account reconciliation solution like Oracle ARCS reduces the risk of errors and increases overall performance.
Error-Prone
The potential for mistakes is greater when data is being entered manually and shared between systems, and the more steps involved in the process, the greater the scope for error. The potential for mistakes is higher when data is entered manually and the more steps involved in the process, the more the potential for error. This could result in missing or lost reconciliations. Many finance and accounting departments still use spreadsheets that lack the ability to validate data and even a minor error in one of the cells can result in huge inaccuracies in the final outcome.
Lack of Visibility and Control
Modern businesses need real-time information with more transparency in financial reporting, and spreadsheets can’t provide this level of visibility. There is a lack of control without a centralized database, which can hinder long-term planning, strategy, and decision making. Inaccurate data can also have an adverse impact on the organization’s credibility. Automating your account reconciliation process using Oracle ARCS solution can help you address this challenge.
Lack of Standardized Reporting and Auditing
Deploying a number of different systems and applications might make sense for a while but only increases complexity and produces output in different formats. This is a challenge faced by most businesses, irrespective of their industry or size. Inaccurate or inconsistent data transmitted by the senders, different file formats, and fragmented systems, create unnecessary obstacles that can be avoided by having centralized cloud-based account reconciliation software.
Detecting Fraud
Fraud detection is one of the most important reasons for account reconciliation. However, if your account reconciliation processes and systems are outdated and don’t provide adequate visibility, they can fail to detect instances of fraud or mismanagement within the company. For instance, an employee could manually alter the data being entered into your ERP systems to hide any fraudulent transactions that might have taken place.
