Account Reconciliation Tools Comparison

By Kars Stal, Caroline Bennett, and Chandan Malhotra

Introduction
World class companies leverage account reconciliation tools to enhance the account
reconciliations process.  These tools provide automation, workflow capabilities, and increase overall compliance within the account reconciliation process.  The reconciliation process, when manual, is extremely time-consuming and can be a major bottleneck in the overall close process.  In addition, manual processes introduce risk within the process through human error.

Though many of the account reconciliation tools on the market today provide similar capabilities, there are key differences, which may make one a better fit for any organization than others. Choosing which tool best fits your organization can be a challenging decision, with factors such as functionality, user experience, ability to customize and cost to take into consideration.

This article will compare the industry leaders of account reconciliation tools including:

  • Oracle Account Reconciliation Cloud Services (ARCS)
  • Blackline Account Reconciliation
  • Trintech ReconNet

This article is written by experienced Oracle ARCS implementers with deep expertise in Account Reconciliations and new functionality is released on a monthly basis for all products being compared. For a detailed comparison of the products, it is recommended to engage with the respective software providers and engage them for demos based on your specific reconciliation and matching requirements.

Overall, Oracle ARCS stands out among its competitors, amongst others due to lower total cost of ownership over 3 – 5 years, ability to fully cover the financial close process across multiple integrated products, and set-up and reporting flexibility to address company specific needs.  In this article, we will discuss each of the functionality that was assessed and reasoning for the overall rating.

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Integrated Data Loads
The integration and flexibility with Blackline and Trintech require a specific data set format and file-based data loads. On the other hand, Oracle ARCS allows for flexible file-based data loads and account grouping (beyond functionality available in Blackline and Trintech) to reduce per month reconciliations. Flexible and automated file-based data loads are enabled through a combination of EPM Automate and Data Management, which is the data integration toolset for ARCS. This toolset is very powerful and has the ability to automate and translate data into the required target format from a wide variety of source flat files.

Out of the box automation for administration is an important feature when analyzing Account Reconciliation solutions, due to the minimized configuration and ongoing maintenance required and ability to guarantee data is not influenced during the reconciliation process.  Blackline and Trintech do not provide out of the box automation tools for application administration, while Oracle ARCS provides EPM automate.  EPM automate enables significant automation for mass administration updates and integrated data loads with basic to minimal programming skill required.

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Application Utility and Workflow
The number of templates and ability to customize templates provide companies more flexibility in their solution.  Blackline and Trintech provide 8 templates with slight customization, while Oracle ARCS provides more than 20 with the ability to configure to fit business needs. Template configuration ability needs to be reviewed against client requirements. Most clients fit into a certain structure of template usage and functionality in all tools would cover this requirement. If a company has more complex reconciliation requirements, ARCS would be a better fit.

Account reconciliation tools must also provide workflow functionality to track and manage the account reconciliation process.  All software vendors provide standard workflow with multiple levels of review. Oracle ARCS provides functional rules to enforce actionable workflow items that support accounting policies and procedures.  In addition, business rules can prevent a preparer from submitting a reconciliation if an identified adjustment exists without an action plan.

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Dynamic Risk Rating
Dynamic risk rating automatically assigns risk levels to each account based on a pre-determined set of criteria, typically based on dollar thresholds, account type, or reconciliation frequency. Based on the risk rating of High, Medium, or Low, clients can assign different due dates and frequencies to complete the reconciliation.

All software vendors provide risk rating categorization for account reconciliations:

  • Oracle ARCS provides functional rules that assign a dynamic risk rating to reconciliations based on attributes defined by accounting policies and procedures
  • Blackline and Trintech allow setting risk rating once a month and manual process to update reconciliations
  • Blackline does not provide notification for reconciliation that require a risk rating change

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Transaction Matching
All software vendors provide Transaction Matching solution.  The major difference between the vendors is whether it is a unified or integrated solution.  Blackline and Trintech Transaction Matching feature is housed in separate modules.  Oracle provides an integrated reconciliation solution with access to both Reconciliation Compliance and Transaction Matching modules within the same platform. Clients should also discuss pricing options with the respective vendors. Both Blackline and Trintech incorporate a pricing model based on number of transactions, where Oracle is based on a flat monthly fee, independent of number of transactions.

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Variance Analysis
Similar to Transaction Matching, the main difference with variance analysis, is based on the
module integration and licensing.  Blackline’s Variance Analysis is housed in a separate module and charges a separate license fee for Variance Analysis module. Oracle ARCS provides an add-on value from account reconciliation to variance analysis within the same platform without incurring any additional license fee.

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Conclusion
When choosing an account reconciliation tool, companies must consider functionality, performance, client satisfaction, and overall cost of ownership.  We do recommend client’s to prepare a full list of requirements related to the account reconciliation solution and include the broader close and consolidation toolsets and capabilities as they review the account reconciliation solutions.  Dependent on these requirements and your overall platform strategy Oracle ARCS is a tool to be considered.

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