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December 28, 2022
A lot of companies struggle with the possibility of automated payroll records reconciliation. To learn about its possibilities, read the article.
Between the myriad of daily tasks that finance professionals are responsible for, closing month-end books and managing year-end close processes can be a grueling affair. This is particularly true when your company requires multiple levels of sign-off for each account and often requires decision-makers to review/approve countless automated financial reports/memos outlining the balances in various accounts. Automating some of these processes is a must for many businesses.
Enter financial automation - the process of creating automatic business functions so that routine activities don’t have to be handled by an individual. A rising trend in the business world, it’s a combination of software and process design that helps streamline your company’s finance processes.
This blog post will explain what financial automation is, why you should be automating your month-end processes, and most importantly how you can start automating today.
An automated reconciliation is when a machine helps perform certain portions of the reconciliation where possible and eliminates the logistical and administrative tasks to ensure adequate transparency and real-time data. It leverages robotic process automation (RPA), machine learning, and AI technology to replace the manual task of monitoring and comparing a company’s sheet account balances to its accounting records.
Best practices say accounts should be reconciled every month to ensure the validity of their transactions and the accuracy of company balances. There are several types of reconciliations, such as bank reconciliations, prepaid, deferred revenue, AP, AR, and so on. But they all have something in common: when done manually, they become a tedious and inefficient process.
Whether your payroll team rolls into Finance, Shared Services, or HR, all typically share the same complaints: spreadsheets, manual processes, lengthy year-end tax issues, time wasted researching and dealing with corrections, and frequent overtime required to get it all done.
These kinds of issues that often create significant risks are:
Inaccuracies can get material, fast - Payroll inaccuracies can quickly become material. According to Paycor, for many companies, wages, benefits, and related payroll taxes are typically the most significant expenses incurred, accounting for as much as 70% of total business costs in some industries.
Potential fraud risk- Poor reconciliation processes can also mean failing to identify incidences of payroll fraud because manual processes inadvertently concealed falsified numbers and records. Risk of regulatory penalties. Every year, the IRS and SSA match data across W-2 and W-3 forms, as well as reported employment withholding information. When errors are found, the IRS penalizes you for submitting the wrong payroll tax amount and it can be substantial, ranging from 2-10% of total payroll, according to Paychex.
Significant drain on time and resources - Deloitte’s Payroll Operations Survey found that for companies with thousands of employees, there can be dozens of FTEs involved in managing payroll, and often a substantial share of those resources’ time is spent on manual processes.
This is why payroll automation is often an attractive opportunity for automation.
If you’re using manual reconciliation, you could be wasting over 600 hours a year per employee. Manual reconciliation takes an extreme amount of manual effort and time. On average, it can take almost a third of your team’s time to manually sort, process, and interpret the piles of information involved in reconciliation. Because it takes so much time to process reconciliation, it’s likely to be riddled with errors and can quickly become outdated.
Automated reconciliation streamlines the entire process. Automation allows you to get accurate reconciliation insights frequently, rather than whenever your team is done with the manual review process.
Automation reconciliation saves your entire team time and provides you with more accurate and relevant data.
With a grasp of the concepts regarding payment reconciliation, there are still processes in the middle to keep in mind when designing a fully automated pipeline for payment reconciliation.
One must consider the best practices both in terms of efficiency and ethical standards. For efficiency, we have to make sure that all individual parts of the payment reconciliation set up provide accuracies that outperform traditional approaches while bringing the cost down or at least it's kept at similar levels as that of the traditional approach.
Ethically, one must also ensure the development of the reconciliation to be fair and equal and not be biased or allow illegal profiteering by any of the stakeholders. Checks across various departments must be conducted before fully deploying the system.
The future of payment reconciliation is very optimistic and here’s the best part: your company doesn’t have to hire a team of data science experts or Machine Learning Engineers to start harnessing the power of Intelligent Document Processing for reconciliation of payroll records.
VisionERA platform is the premier intelligent automation offering, powerful and flexible enough to automate any type of document process in an enterprise environment and streamline your mission-critical, data-centric processes today. We put the work into building and training our neural networks (a.k.a. teaching, and constantly reteaching, our models how to read) to handle complex documents with the highest degrees of reliability. This means your company can spend less time sorting documents, transcribing data, and fixing errors and more time serving customers.
From large financial services companies in need of a highly-scalable solution for loan originations to government agencies drowning in assistance applications, we’ve helped reduce error rates by 67% and facilitated a 5x throughput increase in an extensive variety of enterprise workflows, enabling organizations to focus on improving customer experience.
High-quality extraction starts with high-quality processing and classification. Unlike other solutions that require explicit pre-processing pipelines to attempt corrections for adverse document conditions, we have trained our Machine Learning models on proprietary data sets to tackle real-world imperfections with ease. What does that mean for you? Straight out-of-the-box, VisionERA can classify the types of documents submitted, rotate and improve quality when needed, and even ignore blank pages.
Accurate data is the critical step zero, especially when your client’s taxes are on the line. Next in the process comes best-in-class extraction. We utilize a suite of proprietary Machine Learning algorithms designed for enterprise-grade data extraction.
After extraction, the Platform is able to validate document-specific information by confirming its accuracy with external systems, modify and enrich data to create more value downstream, and finally output it to your preferred location or tool.
An intelligent automation solution can be the difference between client retention and acquisition versus client frustration and loss. In a future wherein clients are expecting more, and want it faster, IDP and intelligent automation could be the most impactful addition to the payroll processing industry since the invention of the calculator.
Note: Currently, you can implement VisionERA in your organization at $0 invoicing!
Interested in a detailed walkthrough, connect with our automation experts by clicking on the link here. Want to try VisionERA by yourself, use our trial version!