The accounting team is tasked with maintaining accurate financial records. Accrual reconciliation plays a vital role in ensuring financial accuracy. Leveraging the right tools can make the process much more efficient.
What is Accrual Reconciliation?
Accrual reconciliation is the process of matching accrued expenses with their corresponding balances in the general ledger (GL). This ensures that financial statements accurately reflect the company’s liabilities and expenses. While many organizations still perform this process manually using spreadsheets, adopting standardized templates and automated systems, such as BlackLine, can significantly enhance efficiency.
The Power of the Accrued Reconciliation Template
Watch our BlackLine Practice Leader, Adam Riskin, explain how to effectively use and customize accrual reconciliation templates in BlackLine.
An accrued reconciliation template provides a structured approach to tracking and validating accrued balances. Here’s how it simplifies the reconciliation process:
- 1. Automated Roll-Forward Schedules: At the beginning of the year, the expected monthly accrual amounts are scheduled. The system automatically rolls these forward, maintaining an accurate forecast of what the GL balance should be for future months. For example, if the monthly accrued amount is $50,000, the template ensures the schedule reflects this amount each month, creating consistency and predictability.
- 2. Real-Time Adjustments: If business needs change, the accrued amounts for future months can be adjusted. For instance, if July’s accrual needs to increase from $50,000 to $75,000, this can be updated in the system. However, historical amounts that have already been certified remain locked, ensuring data integrity.
- 3. Handling Complex Scenarios: The template accommodates scenarios like bonus payouts. If bonuses are paid twice yearly, such as in June and December, the schedule allows for adjustments. This ensures accruals are reduced to zero for payout months while maintaining accurate records for future periods.
- 4. Standardization Across Teams: One of the most significant benefits of using an accrued reconciliation template is its standardization. Teams often have varying methods for creating schedules, which can complicate reviews and audits. Templates ensure consistency, making the reconciliation process more transparent and streamlined.
- 5. Auto-Certification for Time Savings: The system’s auto-certification feature is a game-changer. When the GL balance matches the scheduled amount for a given month, the reconciliation is automatically marked as complete. This reduces manual effort and provides confidence in the accuracy of financial data.
Why Transition from Excel?
Many accounting teams still rely on Excel for accrual reconciliations. However, Excel’s flexibility can sometimes lead to inconsistency, making the review process cumbersome for auditors and approvers. A dedicated template not only saves time but also enhances accuracy by minimizing human error and ensuring a standardized format.
Accrual reconciliation templates in BlackLine are a valuable tool for accounting teams seeking to optimize their processes. By automating schedules, enabling real-time adjustments, and fostering standardization, these templates improve accuracy and efficiency. If your organization is still navigating the complexities of manual reconciliations, transitioning to a standardized template system could be the transformative change you need.
Are you ready to simplify your accrual reconciliation process? Start exploring the possibilities today and bring precision and efficiency to your financial workflows!
Read more about Accounting & Accounts Receivable:
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Importing Multiple Accrual Schedules into a Reconciliation With BlackLine
