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ERP systems miss the reconciliation mark

Many large ERP platforms still don’t have fully functioned reconciliation, leaving many businesses, including Qantas in the past, to use spreadsheets to handle the task…Reconciliation

Reconciliation isn’t sexy – but it is important as it ensures that the amounts being set aside for specific items are being spent where they should be. As such it’s essential to good financial hygiene.

Therese Tucker, founder and chief executive of BlackLine Systems which specialises in cloud-based reconciliation, and who is currently in Australia said yesterday: “There are a number of things that big ERP systems don’t handle – despite the amount of money that people pay for them. It should do everything apart from cook your dinner.”

She said that users of ERP systems still often needed to use spreadsheets to reconcile their accounts – a process which can introduce errors, and also potentially mask fraud. BlackLine can integrate with any ERP (although it is an SAP endorsed solution) to pull financial information into the cloud and reconcile that.

Deployed at international companies including eBay, which had about 10,000 accounts each month to reconcile, IBM, Costco and AT&T, the system has also been rolled out into 110 companies across Australia and New Zealand following BlackLine’s Asia Pacific expansion which kicked off in 2009.

Qantas began using the system – which is hosted on computer servers based in the US – last October, linking it to the airline’s underlying Oracle systems.

According to Grainne Saunders, Qantas’ head of accounting services and financial control, not only does automated reconciliation streamline processes, it “shows a lot of the housekeeping to be done,” and “opens up the dirty laundry basket around your reconciliations”.

Saunders added that automated reconciliation could also provide businesses with a strong reason to negotiate down their auditing fees, because of the speedy and comprehensive reconciliation that could be achieved when compared to manual systems often relying on Excel spreadsheets.

Negotiating down supplier costs has been particularly important for Qantas of late which last month posted a whopper $A2.8 billion loss for 2014. “Because we have had such a difficult time we went to a lot of our suppliers and negotiated with all of our suppliers,” said Saunders.

Asked whether BlackLine had reduced the price it charges Qantas, Tucker said “Qantas got a pretty good rate”.

Because BlackLine is a cloud-based system, access to the reconciliation data can also be supplied to auditors, allowing them to check the reports directly. Saunders said that at present Qantas was still hesitant to provide its auditors with full access, although she acknowledged that would likely eventually be provided.

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