- March 28, 2019
- Posted by: Jide Alaka
- Category: Blog, IT
Unchecked blood pressure could lead to Hypertension, or high blood pressure, often referred to as the silent killer of humans just as unchecked or defective Accounts Reconciliation must be referred to as the silent killer of businesses – whether local or global.
High Blood pressure is a common health term – and one of the first tests or checks for any person on a clinic or hospital visit is the blood pressure check though it is not trumpeted as a very important part of the physical and physiological evaluation.
But knowing the state of your blood pressure can mean the best or the worst for human health intervention – the same way Accounts Reconciliation is not considered a ‘great and important’ part of the business chemistry when in fact the constant Reconciliation evaluation can tell and pinpoint how vigorous the health of a business is.
While Blood Pressure is an evaluation of whether the heart is straining to do its normal task; Reconciliation is the evaluation of the bottom line – income versus expenditure, which ultimately determines whether a business will go bankrupt now or be here tomorrow.
According to Inova, checking your blood pressure will help you evaluate “your actual age to your heart’s biological age, calculate your risk of developing cardiovascular disease, prioritise your most harmful cardiovascular risk factors and more.”
Paraphrasing this with Philip Ayeni, one part of the duo behind CLIREC, a Reconciliation solution explains why the process is very important for businesses.
“The cash ledger — inflow and outflow determines the state of business at anytime but many CEOs are not wary or up to date about the report. The recognition of this report enables the business to catch fraud at the teething stage and expose other irregularities before they become major issues the business cannot combat.”
Harvard Business Review in a report on why Financial Reporting falls short says, “In a perfect world, investors, board members, and executives would have full confidence in companies’ financial statements. They could rely on the numbers to make intelligent estimates of the magnitude, timing, and uncertainty of future cash flows and to judge whether the resulting estimate of value was fairly represented in the current stock price.”
But consistently and unfortunately, the above statement does not hold true because the Reconciliation report is not automatic, foolproof, and consistent.
Citing the highest body of Accountants, ACCA, “Automation of the account reconciliation process is a critical step on the road to achieving balance sheet integrity” – and ultimately, a timely and efficient financial close.”
Joseph Afere, an accountant with Precise Financial Systems says, “Timely reconciliation and reporting irrespective of volume of transactions and the number of accounts – achieved at the click of a button, is the way to stay ahead of any curve ball financial reporting will throw at you and ultimately help the business continuously make informed decisions.”
The general rule of business is to have the Reconciliation process once every month but the business truth is that your business could be gone in that one month.
Automated Reconciliation allows the discerning CEO to have a Reconciliation report at any time, anywhere, and in whatever format after the close of every financial period.
What is the close of a financial period? Is it daily, weekly, monthly, or quarterly?
Blackline says, “The account reconciliation process must be completed before a company can certify the integrity of its financial information and issue financial statements.”
Postponing reading your blood pressure could mean 30 days to endanger your Kidney, Liver, or even your arteries and for those organs to be at a point of failing irrevocably.
So instead of being wheeled into surgery, you can walk into the outpatients’ ward, get your reading and know what to do instead of waiting 30 days when it would be costlier, more painful, and could even cause death!
Reconcile your accounts daily or even, intra-daily, so you are alive to do business tomorrow.