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.

Achieving Financial Close Best Practices using Oracle Financial Consolidation and Close Cloud – Close Manager

By Kars Stal, Soumadeep Guha and Kaushik Sarkar

Overview

Accelerated filing deadlines, along with shifting regulatory requirements, have compelled finance leaders to streamline and enhance the financial close process. Manual tracking of the close process, using excel and e-mail is one of the reasons companies still experience issues in their close process from an accuracy, transparency, complexity and comprehensiveness perspective.

Automated close tracking tools give companies the ability to closely monitor the financial close process, infuse best practices and apply continuous improvement into financial close and drive process automation where possible. Oracle offers, as part of its Financial Consolidation and Close Cloud Services (FCCS) offering, a module called Close Manager (CM). The Close Manager module provides an automated and standardized manner of managing financial close activities. This paper discusses five best practices to achieve close tracking efficiencies using the FCCS-CM module.

The following FCCS – CM features are discussed that help achieve the below best practices and related efficiency and control gains:

  • Planning and tracking the financial close process
  • Continuous communication
  • Standardize and automate
  • End-to-end monitoring
  • Post-mortem evaluation
  1. Planning and tracking the financial close process

In planning the financial close process, and to ensure it runs smoothly, organizations should establish and communicate clearly defined policies, control, roles and responsibilities for team members. Close Manager mandates the assignment of each task within the close tracker template to team members, establishing ownership in the close process. Integrated tracking of these assignments through dashboards provides for improved visibility and real time monitoring.

The financial close process can be divided into segments such as pre-close, close, consolidation and reporting. Each of these segments can represent an interim milestone. Close Manager uses task templates and schedules to plan and manage the close process. Task types can be created in close manager based on the task segments. Task templates and schedules can then be created based on the task types to mark an interim milestone. Close Manager further provides the ability to view these milestones through enterprise dashboards, Gantt charts and integrated calendar views 

  1. Continuous communication

Close Manager uses an automated communication and tracking methodology that enables exponential advancements in the communication process.

Automated alerts

Automated email notifications allow users to be notified of assigned tasks in various phases of the close process. Such automated alerts eliminate risk of potential miscommunication, further optimizing the close process. The below alert capabilities are available out-of-the-box in Close Manager.

  • Late Notifications – a notification that the task is late
  • Status Change Notification – a notification that the task is ready to be worked on
  • Due Date Reminder Notification – a notification that the task is “at risk,” meaning it is almost due
  • Alerts Notification – a notification of issues user encounters during the close process, such as hardware or software issues. Users create alerts identifying a problem, assign them to be resolved, and email notification will be sent to the assignee

Users can click the links in the email to directly access the tasks. Below is a screenshot of an automated email notification from Close Manager

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Integrated Close Calendar

Close Manager provides the capability to view the close progress in real time at any time during the close process through integrated calendar views and Gantt Charts.

The Gantt view displays a timeline for a schedule or template that graphically represents the duration of tasks and the dependencies between them. Bars represent duration, and arrows represent dependencies. Predecessor relationships between tasks can also be viewed.

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  1. Standardize and automate

Standardization and automation are effective ways to streamline the financial close process.

Standardization

Close Manager helps create efficiencies within the organization and provides a standardized approach for tracking the close process. Close Manager being a web-based tool can be viewed/and or edited at the local, regional and corporate level. This helps to create a standardized approach at global level. For example, organizations can incorporate a control mechanism to approve regional changes at corporate level. Similarly, organization can also utilize the audit history associated with each task to get more visibility at corporate level on any task modifications done at a local or regional level.

Close Manager utilizes the concept of task templates and schedules to manage tasks in the close process. Task templates are a collection of repeatable tasks that make up the financial close process by work day (example WD1, WD2). Task templates are incorporated into monthly/ quarterly schedules converting the work day to calendar date. (Example WD1 = January 2, 2018). Creating standard templates for monthly and quarterly tasks and reusing the same for each calendar period through schedules introduces standardization across the task management process. Further efficiencies can be achieved by reviewing and standardizing the templates across various regions and business. As a part of continuous improvement, the templates should also be reviewed on a quarterly basis using out of box Close Manager reports and dashboards. Such quarterly review will reduce task redundancy and ensure task validity. Users can also make comments in a task to identity improvement opportunities for a schedule.

A standardized workflow approach can be implemented for each schedule and task, limiting confusion and promoting accountability. Every schedule and task is assigned to an owner to provide responsibility. Close Manager provides the option of multi-layered workflow for each task. The below user roles available in Close Manager helps implement a multi-layered workflow approach to achieve process management standardization and encourage ownership

  • Assignee – Responsible for completing the task. Assignees have read access to all task information. Assignees can also add comments and answer necessary questions to submit a task for approval.
  • Approvers – Approvers review and sign off on tasks ensuring quality and task completion. Approvers have read access to all task information and can add comments/attachments where necessary. Each task in Close Manager can also have multiple approver levels. Close Manager allows for a maximum of ten approver levels.
  • Owners- Owners are assigned to every task and automatically have Write access to tasks. Task owners ensure that the tasks are completed, although they may not perform actions on the actual task. Owners receive notifications when the task status changes and can intervene in the task workflow at any time.
  • Owners can edit task properties like add or remove instructions, questions. Owners can also reassign assignee or approvers to a task.
  • Viewers – Viewers have read access to all task information. The Viewer role can be assigned to teams and individuals.

Automation

Task automation helps organizations recognize significant improvements in time and effort related to close process and reduce repetitive manual work from the close cycle.

Standard automation in close manager includes workflow automation, and automated communication using automated alerts (as discussed earlier in this post). As a part of the workflow automation, an assignee will have the ability to click an email link to gain access to the assigned tasks. The workflow will automatically move the task along its lifecycle based on provisioned responsibilities such as assignee, approvers.

Enhanced task automation can be achieved through an integrated solution with external applications. Close manager provides the capability to achieve enhanced automation through integrations to different cloud applications. Configurable task types can be created in close manager based on the type of integration. Each task can then be associated with the custom task types which will allow seamless integration across or within the application. For example, account reconciliations in ARCS can be integrated with reconciliation tasks in Close Manager. Opening a reconciliation task in Close Manger will redirect a user to the reconciliation in ARCS. Once the reconciliation is completed in ARCS, users can submit the reconciliation task in Close Manager to close the reconciliation. Similarly, close tasks in Close Manager can be integrated to Manage Journal module in the Consolidation application in FCCS. Opening a journal task will redirect a user to the journal entry form in FCCS. Users will then be able to create and post a journal entry. Once a journal entry is posted users can submit the task in Close Manager to indicate completion.

  1. End-to-end monitoring

Close Manager gives users the ability to track the close process end-to-end, ensuring compliance with financial close plan. End-to-end monitoring can be achieved through out-of-the box dashboards and reports with multiple views to monitor the close process.

Dashboards

The out of the box dashboards provide simple, efficient views into schedules and task lists, and high-level status overviews which can be drilled down to lowest level of detail. Users can filter the data displayed, customize the dashboard layout, and maximize or minimize dashboard controls.

The Close Overview dashboard provides a count of open, late and on-time tasks by priority. Users can also view the count of open, late, and on-time tasks by task category, schedules or organization units.

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The Compliance Overview dashboard provides a count of completed tasks, percentage of tasks prepared on time, percentage of tasks approved on time, count of rejected tasks, and count of alerts issued. This dashboard can be viewed by users as well as organization units. The compliance dashboard further provides break down of each view by compliance metrics as defined in the Close management application.

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Reports

Close Manager reports also provide the ability to analyze, monitor the close process and review, print necessary attachments. Close Manager reports contains all the pertinent information involving the close including start/end times, dates, tasks executed during the close and who executed the task etc. The below close management reports are available out of the box to support end -to-end monitoring

  • At Risk Tasks
  • Close Compliance Analysis
  • Early Tasks
  • Late Tasks
  • Close Performance Analysis by Organization unit
  • Rejected Tasks
  • Task Audit Trail
  • Users with Late tasks

Additionally, report binders enable users to create a history of all activities that occur as a part of the close process. Filters can be used to specify the information to be included in the report binders. Information for all tasks that meet the binder filter criteria can be generated in HTML format to a single, self-contained ZIP file, which enables easy distribution for internal or external review.

  1. Post-mortem evaluations

Key close metrics defined in Close manager can be used to perform post-mortem analysis. Close Management reports and dashboards provide a central repository to support continuous process improvement and rapid insight in bottlenecks within the close process. In addition to dashboards and reports, Gantt chars, calendars and task lists can also be used to perform post-mortem evaluations. Below are several key metrics that Close Manager can monitor through dashboards, reports and task views to support post-mortem review process

  • The number of tasks that were not completed
  • The number of tasks completed on time
  • The number of tasks that were complete late
  • The length of time associated to completed tasks
  • The number of rejected tasks
  • The number of error alerts issued during task completion

Best practices around close manager implementations can be combined with these key metrics to analyze close effectiveness and identify process improvements. For example, a rejection reason code can be mandated for tasks that are rejected. Analysis can be performed to identify and rectify the most common rejection reasons. Similarly, implementing the predecessor task property enables users to analyze task interdependencies and identify any bottlenecks for late task completion. The number of error alerts metrics can be used to identify and rectify the most common error alerts that prevent task completion. A thorough monitoring and analysis of the key metrics will help organizations achieve world class close tracking standards.

Conclusion

The financial close process is too important to track progress via emails, Excel, meetings and conference calls. Companies that can automate their financial close tracking through an automated tool should do so.

One of the tools available to automate the financial close tracking is Oracle’s FCCS – Close Manager. Close Manager can reduce close cycle times and increase accuracy of close cycle times, delivering timely results both internally and externally. Close Manager can further drive in-depth analysis of key performance and operational metrics. An automated close tracking tool like close manager reduces compliance cost and delivers a single version of truth to improve internal and external transparency.