Overcoming General Ledger Reconciliation Challenges: Why UK Accounting Firms Should Consider Outsourcing

The number one goal of any professional UK-based accounting practice is to create a good impression on clients. One way of doing that is by offering accurate and thorough accounting services. Your clients depend on your accounting services to run their business efficiently and make informed decisions; for that they will depend on the financial data collected by us. These data are then used to make financial reports such as profit and loss statements and balance sheets. Collecting and compiling all financial transaction data in an organised accounting record is called a general ledger.

The general ledger is one of the most important documents used in making other important financial documents. Therefore, it is vital to ensure all the data in the general ledger is authenticated beforehand. Yes, collecting and recording is just one part of the job; another critical part is authenticating the transactions recorded. Any errors or fudging in the records will compromise the quality and authenticity of financial documents. If discovered by your clients or, worse, by regulators, will lead to serious trust issues. The consequences of such errors will be penalties on clients and loss of reputation for your accounting practice. To avoid such a painful scenario, you must focus on general ledger reconciliation.

General ledger reconciliation is the process of detailed examination of records, which can be in huge volumes, and your in-house team cannot afford to be bogged down with this work. It can divert your resources and time from other important accounting work. In such a situation, you must use the outsourced bookkeeping services offered by outsourced accounting service providers. But first, let’s understand general ledger reconciliation in detail.

A Brief on General Ledger Reconciliation

To make the general ledger free of errors and trustworthy enough to use for creating financial reports, it must go through the general ledger reconciliation process. So, what is this process, and why is it so important? First of all, general ledger reconciliation is a necessary process that helps maintain the integrity and accuracy of financial records. Under this process, the financial records are compared with external documents such as receipts, bank statements, and invoices, to name a few. Due to general ledger reconciliation, financial records can be made transparent, compliant and reliable, thus aiding decision-makers in making the right assessments.

But that’s just half the story because UK-based accounting practices increasingly face challenges while doing general ledger reconciliation for their clients. These challenges have increased the instances of errors in financial records and overall inefficiencies. Getting in more experienced personnel can combat these challenges to a certain extent but if you are interested in a complete solution then you must choose to outsource general ledger reconciliation through outsourced bookkeeping service offered by professional and reputed outsourced accounting service providers. They use the latest automation tools to automate the process, thus reducing your workload; check how automation tools simplify general ledger reconciliation. Before that, let’s look at the common challenges UK accounting practices face while doing general ledger reconciliation.

Common Challenges in General Ledger Reconciliation

The general ledger reconciliation is essential, but it is even more important to address the challenges that hinder the smooth working of the reconciliation process. To tackle these challenges, you must first identify and understand them thoroughly. Well, we have taken the liberty to identify certain common challenges troubling all UK accounting practices. These challenges are:

Errors While Doing Manual Data Entry

It will be hard for you to believe, but some accounting practices in the UK still prefer manual data entry. As an experienced accounting practice, you are aware that manual data entry increases the probability of recording incorrect transactions, leading to discrepancies.

Time-consuming Process

Your accounting practice will be handling multiple clients with a high volume of transactions on a daily basis. Such a huge volume of transactions must be matched and verified, and this will be a time-consuming and complex task. To handle this situation, you will have to recruit more personnel or streamline the process by outsourcing and free up resources that can be diverted towards value-added services.

Complex Transactions

Your in-house accounting team must have handled multiple complex transactions, and we have complete faith in their competence and expertise. However, when the complexity and volume of transactions come together, they can overwhelm even the most capable teams. Handling such complex transactions requires a perfect combination of automation, tech, and expertise, which you can find only in service providers offering outsourced bookkeeping services. Only they can ensure an accurate reconciliation.

Inconsistent Record Keeping

When financial transactions occur, it is paramount for your accounting practice to record them immediately according to the set process. However, any inconsistencies in the record-keeping process will lead to missing documents or unknown transactions that complicate the reconciliation.

Lack of Skilled Manpower

While conducting recruitments, you must have faced ample difficulties in getting the required experienced, skilled human resources. It is important to remember that general ledger reconciliation requires ample expertise to handle complex transactions. There is only one place where you can find such expertise without burdening your budget, i.e., an outsourced accounting service provider.

High Costs

The cost of recruiting, training, and maintaining an in-house reconciliation team is very high, which you will surely like to avoid, given a dependable option. That option is outsourcing the task to a UK-based accounting service provider, which will reduce your cost and the workload of your accounting team.

Complying with Regulatory Regulations

You are bound to follow the regulations HMRC sets while running your accounting practice, especially while conducting reconciliation. However, with strict enforcement, increasing complexity and frequent updates to the regulation’s, compliance is becoming daunting. This problem escalates when you are managing multiple clients. Keeping a full-time eye on the updates in the regulations will help you achieve full compliance.

Since your budget is limited, you cannot keep expanding or investing in new technologies. In such a situation, you have one option to tackle all the above-listed challenges: outsourcing general ledger reconciliation to an outsourced accounting service provider. How? Let’s understand it in detail.

How Outsourcing General Ledger Reconciliation Helps UK Accounting Firms

Sensing the challenges UK-based accounting practices face in successfully conducting general ledger reconciliation, multiple outsourced accounting service providers have started offering outsourcing services.

Thanks to their outsourced bookkeeping service, multiple practices have effectively dealt with reconciliation challenges. Wondering how it helped multiple UK accounting firms? Let’s find out.

Access to Pool of Expertise

Many outsourced accounting firms have industry-specific expertise and experience and can perform reconciliations on your behalf, thus reducing the work pressure on your in-house general ledger reconciliation team.

Use of Advanced Technology

In addition to access to experts, you will also have access to the latest tools and technology that will simplify and automate the whole process. This advanced technology will help your practice boost efficiency and reduce errors in the reconciliation process.

Flexibility and Scalability on Demand

There will be times when you will have an increased volume of reconciliations from multiple clients. At that time, an outsourced accounting service provider will come to your rescue by handling most of the reconciliations without any compromise on quality and without any additional recruitments.

Improved Turnaround Time

An outsourced accounting service provider will complete the reconciliations faster, using the latest tools and experienced staff, thus helping you meet the deadlines.

Focus Back on Core Activities

The general ledger reconciliation process is time-consuming and labour-intensive and can divert attention away from core accounting activities. By outsourcing the task of reconciliation to a service provider, you are ensuring that the general ledger reconciliation is addressed and that your team has enough time to focus on other activities, such as financial advisory, tax planning, and client relationship management.

Conclusion

While we are fully confident in your team’s ability to handle general ledger reconciliation for multiple clients, our experience tells us that things can get pretty overwhelming when the workload increases. Such a situation can severely impact the quality of work, creating problems for your clients, especially when preparing financial reports. Hence, you need to pre-empt the problem by outsourcing general ledger reconciliation.

Currently, multiple professional UK-based outsourced accounting service providers offer their valuable reconciliation services through outsourced bookkeeping services. Among these professional service providers is the highly ambitious and increasingly reputed, Corient UK. We are a highly professional outsourced accounting service provider based in Coventry, United Kingdom. Along with reconciliation services under bookkeeping, we offer a wide range of services, from payroll and year-end to audit and corporation tax. Our services have positively impacted numerous accounting practices in the UK, especially by streamlining their general ledger reconciliation. We can do the same for you; just have to state your requirements and queries on our website contact form. Our executive will get in touch with you at the earliest. We are eager to have a long and productive partnership with you.