With over 10,000 transactions processed daily, reconciling every single transaction manually in a casino chain can quickly become an accounting nightmare. This case study explains how SmartConcil helped our client to optimize their reconciliation process, saving thousands of dollars on operational costs and transactional errors.

Most businesses today deal with an ever-growing volume of financial transactions, all of which increase the chance of errors and inaccurate information. The sources of financial data are also quickly multiplying: debit/credit card transactions, payments gateways, invoices, bank statements, multiple currencies, multiple bank accounts, ERP systems, CRM systems… it is easy to see how this adds pressure to the accounting and finance team and makes it more difficult to justify the use of spreadsheets and dispersed data.

In this scenario, manual reconciliation is the least efficient and most cost-demanding process in a company. It is also highly error-prone since it involves keeping track and comparing high volumes of transactions in spreadsheets.

 

The Problem

For our client, the challenge was tenfold. With 20 casinos and over 10,000 daily transactions coming from various sources, manual account reconciliation was a bottleneck in the operation.

They were looking for a tool that could automate the reconciliation process, consolidate financial information of all operations in one place and accelerate the process so they could promptly identify inconsistencies and missing/incorrect transactions.

Additionally, due to the dynamics of the business, they also needed an easy way to integrate new sources of information, to accommodate new lines of business or incorporation and changes in bank operations.

 

Collecting Data

Gathering information from each of its 20 establishments on daily-base was a key requirement of the automation process for our client. The client needed to validate that the income of each establishment matched the ERP data and bank statements and reconcile transactions from each establishment separately.
The data sources considered for the reconciliation process were:
  • All transactions generated with Credit/Debit card & Cash
  • Payment gateway transactions (if any)
  • All the information generated in every establishment
  • Data extracted from the ERP systems
  • Bank Statements
SmartConcil can read information from the most common layout formats and has a third party integration with some of the most popular ERPs, avoiding the need to download and upload data from one system to another. The platform reads bank statements and classifies every single transaction. From a financial integrity standpoint, this is an excellent way to eliminate humans errors and data manipulation. It is also a way to trace every single action executed from the system.

Step 1: Importing Data

The first step of the process is the automated import of data into the system. Smartconcil collects information from each establishment and system involved in the operation automatically, ensuring financial data integrity.

Step 2: Classify Data

Using a rule-based algorithm, SmartConcil analyzes each transaction, identifying patterns and categorizing according to a list of transaction rules. These are transactions that occur routinely and that can be easily identified through a number, an ID, a reference, a description.

Based on this classification it is possible to distinguish the source and nature of the transaction and, if necessary, apply extra rules (for example commission fee’s rules, VAT rules, exception rules, etc).

Step 3: Label Transactions

Another advantage regarding the classification is the possibility to label transactions to be considered for a specific reconciliation process (transactional reconciliation, bank reconciliation, etc) or discard them if they aren’t relevant. The user will be notified of all the transactions not considered in the process so they can manually review and authorize it.

Once the automatic uploading process is finished, the matching process is ready to start.

 

The Matching Process

In the case of our client, we created a 2-step or 3-step reconciliation process:
  1. Transactional Reconciliation. The first step consisted of comparing information between transactional systems (credit/debit card transactions) and their ERP system.
  2. Bank Reconciliation. The second part of the process is to compare the accounting operations data against the bank statements.

Using SmartConcil, over 90% of financial transactions are matched automatically. The software deals with the bulk of transaction matching so the accounting team can focus on the few open entries and exceptions that require additional attention.

We reduced the time of the reconciliation process from an average of 3 hours per day to just 30 minutes, and because everything is executed overnight the only thing the user needs to do the next day is validate the results of the reconciliation process.

 

Fully Automated Reconciliation

With SmartConcil, our client was able to secure better accuracy, full traceability and compliance. They now have an audit trail that shows exactly what has been done, by whom and when.

And let’s not forget, the finance team now has the time and mental space to focus on high-risk areas and higher-value activities.

Do you have a question about improving your reconciliation processes using automated cloud-based software? Request a demo.