Balancing all accounts in your ledgers is the ultimate goal of balance sheet creation. You need to be able to deliver a definitive balance sheet plus a profit and loss statement (P&L) to demonstrate the business continuing viability. Slip-ups and oversights when producing the balance sheet can get your business into serious trouble. If it looks in any way that the mistakes were intentional and influenced investor opinion of the value of the company, you could be convicted of fraud.
Mistakes in the balance sheet will eventually be noticed by auditors. You need to make sure that you can declare in good faith that your financial statements are a true and honest reflection of the business’s financial position.
Here is our list of the seven best balance sheet reconciliation software:
- Oracle Hyperion Financial Close Management: Best balance sheet reconciliation software for large organizations. Oracle’s cloud-based ERP is extensive and it includes a financial management module with a close automation feature.
- Redwood Finance Automation Record to Report: Best balance sheet reconciliation software overall. A SaaS platform that creates workload automation through orchestration and has an edition that is specifically designed for close management and financial reporting.
- Oracle NetSuite: Best balance sheet reconciliation software for medium-sized businesses. A smaller cloud-based ERP delivered by Oracle that includes automated matching and reconciliation through data pooling.
- Intuit QuickBooks: Best balance sheet reconciliation software for small businesses. This system is organized as a support system for businesses and it compiles accounts automatically by translating business transactions.
- BlackLine: Best balance sheet reconciliation software for orchestration. This SaaS platform orchestrates the transfer of data between business proceeds software and accounting packages, automatically reconciling accounts.
- FloQast: Best balance sheet reconciliation software for close management. Designed by a CPA to make closing less of a drama, this SaaS package automates reconciliation as much as possible and tasks team members to deal with exceptions.
- Dolibarr: Best balance sheet reconciliation software that is free to use. A full ERP with an accounting package integrated into it. Not only is this package for Windows and Linux free, but it also includes CRM, HR, and Web management modules.
Account reconciliation
Balance sheet reconciliation is also known as account reconciliation. Each ledger needs to be balanced before being entered into a summary that forms the trial balance. When everyone is happy with the numbers in that document, you can close off all accounts so that they are final and unalterable. Then you can generate your balance sheet and P&L. So, the main task in financial period closing is account reconciliation, aka balance sheet reconciliation.
How does anyone know if the final balance is wrong? You can judge a ballpark figure by looking at the balance for previous years. The company account will know if a big event, such as a successful product launch or a disastrous bad investment, should significantly alter this year’s balance. So, you can get a rough idea of how much the balance should be.
Getting the number exact down to the last cent is just a matter of being sure that no transactions have been left out. To reach a high level of confidence that you have accounted for all activity, you need to look back through all of the business’s documents, namely, orders, goods received notes, invoices, bank statements, sales orders, dispatch notes, and sales invoices.
Orchestration and ERPs
There are two ways to check that your books contain all correct records of business transactions. One is to transfer and summarize all data from your invoicing, stock control, and procurement systems into a calculation tool, such as a spreadsheet. The other is to use a business process support system that includes data centralization and also has an integrated accounts package.
The first of those two methods can be automated with a type of software package that is called an orchestration system. A package that centralizes data and makes operational information available to the accounts package is called an enterprise resource planning package, or ERP.
So, when seeking balance sheet reconciliation software, you are looking for an orchestration package or an ERP. Taking on an ERP means replacing all of your current business software. If you don’t want to completely start again and have to retrain all of our staff, an orchestration system would be your best option.
The best balance sheet reconciliation software
Balance sheet reconciliation software needs to be able to search through business process databases for all transactions and match those to journal entries. It then needs to reconcile each journal and check it against the general ledger (GL). This provides a trial balance. Once that has been approved, the software can close the accounting period and then print off the final balance sheet and P&L.
What do we look for in the best balance sheet reconciliation software?
When looking for the best balance sheet reconciliation software, we rated the following attributes:
- Scale of service – We intended to find the best service for each business type rather than ranking a series of packages overall.
- Platform – Most balance sheet reconciliation systems available today are delivered as SaaS platforms. We favor this model but we also made sure to include an on-premises package for those who prefer to keep their systems in-house.
- Integrations – The connections between business process software and accounting packages are essential so we needed to find ERPs that include a common data store for all functions or orchestration systems that easily plug into a list of important business management systems.
- Security – Financial data must be protected by encryption both at rest and in motion. Activity logging and individual accounts for all staff who get access to financial data are also important.
1. Oracle Hyperion Financial Close Management
The best balance sheet reconciliation software for large organizations
Oracle’s ERP system is one of the longest-running business management systems on the market. Despite its age, the software isn’t out-of-date because it is constantly being refined by Oracle.
The result of years of development is a cloud-based system that is very detailed and allows businesses to define very processes units of measure, cost management models, inventory re-stock algorithms, and so on. The system performs reconciliation actions on business transactions, such as three-way matching and transfers authorized and completed transaction data into the journals. All journals, once approved, get interpreted into the GL.
The Hyperion Financial Close Management system takes over at the period end and performs automated balance sheet reconciliation. The Oracle system has a series of checks at each stage in the data flow, so it is unlikely that you will have erroneous journal entries. You certainly will have open transactions still going through the ERP that need to be managed.
Hyperion Financial Close Management is part of an ERP module called the Enterprise Performance Management (EPM) system. This system offers a range of reporting and analysis services.
2. Redwood Finance Automation Record to Report
Best balance sheet reconciliation software all-rounder
Record to Report (R2R) is an industry term for systems that flow data from business proceeds support software through to accounting packages to closing and reporting. Redwood is a SaaS platform that provides an orchestration system for any business function and it has an edition that is tailored to financial applications.
Close management and automation are central to the Redwood R2R system. This close process automation involves running the software that holds operational data, extracting it, reformating that data, checking journal entries, adjusting or creating entries where necessary. The tool then reconciles accounts, providing the necessary balance sheet reconciliation automation needed for closing.
Not all accounts can be reconciled automatically because there will always be mistaken journal entries that need to be examined manually. In these few cases, the Redwood system raises an alert and allocates responsibility for correcting these problems to an accounting team member.
BEST BALANCE SHEET RECONCILIATION SOFTWARE ALL-ROUNDER:
Redwood Finance Automation Record to Report is a great choice for balance sheet reconciliation software because it efficiently improves the accuracy of your existing systems without you having to change any of your current software packages. The system automates all of the balance sheet reconciliation that can be effected without human authorization and leaves just a few disputed entries for accounts staff to sort out.
3. Oracle NetSuite ERP
Best balance sheet reconciliation software for medium-sized businesses
Oracle’s main ERP package is very large and requires a professional team of technicians to support it. It is only suitable for large businesses but Oracle provides NetSuite for medium-sized enterprises.
The NetSuite system is just as broad as Oracle ERP but not as deep. It doesn’t have so many options for customizations. This cloud-based system is easy to maintain and doesn’t need a large technical team. It allows a team of accountants to work together on managing the accounts because each user can be given an account with specific roles and capabilities.
NetSuite centralizes all operations data and includes an accounting package. This enables the system to automatically generate journal entries and populate GL with clean entries. The final stages of balance sheet reconciliation and period closing are easier because the GL has been well managed throughout the year.
4. Intuit QuickBooks
Best balance sheet reconciliation software for small businesses
Intuit QuickBooks is an accounting package for people who know nothing about accounting. The niche market that QuickBooks aims at is business own-operators. Artisans, contractors, store owners, and so on know how they want to run their business, and they just need a software package that can record their expenses and tot up their income so that they can keep track of their cash position and keep trading. Intuit QuickBooks provides that.
What the people at Intuit know is that those businesses are also required to pay taxes and so they will have to compile accounting reports whether they like it or not. Thus, all of the accounting processes are hidden behind the scenes. Intuit doesn’t scare off entrepreneurs by telling them about double-entry bookkeeping or balance sheet reconciliation.
QuickBooks is a mini ERP that is delivered from the cloud and can be accessed by users through a browser on their computer or through a mobile app. It automatically flows transaction data through to the accounts and issues to-do lists for accounts that don’t fully reconcile.
5. BlackLine
Best balance sheet reconciliation software for orchestration
BlackLine is a cloud-based orchestration package that is specifically designed to flow data towards closing. It combines data transfer technology, data processing, and team management utilities. These three strands add up to a close management system that relies on automated balance sheet reconciliation.
Thanks to a corporate takeover, BlackLine has a product that is designed to manage the close process for SAP implementations. This is called BlackLine SAP Financial Mission Control Center and it is highly recommended for businesses that use the SAP ERP.
BlackLine can bridge different systems and create a centralized store of accounting information to reconcile accounts and close the books. This is a system that is suitable for businesses that have many divisions using their systems. It is also a good tool for multinationals that have to consolidate accounts for the parent company by translating data from different national frameworks.
The BlackLine system has built-in auditing and logging processes, which makes it ideal for businesses that need to comply with SOX.
6. FloQast
Best balance sheet reconciliation software for close management
FloQast was designed by a CPA who was fed up with all of the chaos that always occurs during period closing. This SaaS package is all about planning and timelining and it also provides automated processes for tasks such as balance sheet reconciliation.
This is an orchestration system that runs existing software and extracts relevant data, transferring it through a data processing stage and inserting the resulting records into journals. Account reconciliation will trigger another foray for information and if accounts can’t be balanced, the system raises an exception and allocates the account for manual examination.
The scheduler allows you to set up a team with allocated responsibilities for each member, so the task manager also implements team management functions. It assigns tasks in a process flow and places deadlines on each stage that will enable the target close date to be achieved.
7. Dolibarr
Best balance sheet reconciliation software that is free to use
Dolibarr is a good option if you don’t want to use cloud-based systems and would prefer to keep all of your business software in-house. This suitability is not just because it installs on your servers running Windows or Linux but also because the package includes just about every type of business management software you could ever need.
The Dolibar system has an ERP core that also integrates an accounting package. This is why it is suitable for balance sheet reconciliation. Your journal entries are just business transactions that have been reformatted, so it is very easy to spot gaps and incomplete transactions when it comes to the period close.
With Dolibarr, you also get an HR system and a CRM. On top of that, the bundle also includes Web management tools. Given that the Dolibarr system includes so many modules for running a business, small enterprises would be overwhelmed by it. However, it is very tempting for businesses of all sizes because it is completely free to use, without a catch – there is no paid version.
