How to Do Bank Reconciliation in Real Time, Not a Month from Now

The 21st-century economy moves in real time. Why, then, do you still have to wait until the end of the month to see how your business’s finances are doing?

The answer is, you don’t.

Bank reconciliation is the act of matching and validating your bank’s transactions against those in your internal ledger. The only reason this task was ever done monthly is because the piddling number of daily transactions didn’t warrant a bookkeeper’s time. Meanwhile, waiting too long allowed mistakes or fraudulent activity to go unchallenged.

Unfortunately, with this manual, monthly process, many other negative side effects endured, too:

• Waiting allows for more human error because involved parties forget important details.
• Waiting creates the buildup of work for a stressful month-end.
• Waiting decays the strategic value of the data — no leader wants to make decisions based on month-old information.
• Waiting consigns the finance function to data processing tasks instead of a mission-critical advisory role.

Thankfully, Neat’s real-time, digital approach to bank reconciliation lets business owners keep their books up to date all month long — without sacrificing hours of their life doing it.

Connect your credit, loan, or bank account to Neat

Technology alone enables continuous accounting for small businesses. Execute real-time bank reconciliation with Neat in a few simple steps. Start by streaming your financial institution’s data so the end-of-month statement can be literal history.

Navigate to the “transactions” tab in your Neat dashboard.

 

Select it, and then click “Connect Account.”

 

Choose your bank from the list of over 1,000 financial institutions available in the Connection Wizard.

If your own bank’s logo is not immediately apparent, use the search function below the other icons.

Now, enter your login information. You’ll use the same username and passcode you use to log in to your financial institution’s website or mobile app. Once you input those details, simply wait for the green congratulatory confirmation message.

A list of the accounts you hold with this institution will appear. Connect each one you’d like to stream for real-time reconciliation.

If you hold accounts from other financial institutions, now is the perfect time to connect them as well.

Capture, scan, or email your documents

Next, operate your business as usual, and when transactions occur, send the documents (such as receipts, credit memos, purchase orders, deposit slips) to Neat for auto-reconciliation. You’ll love how easy it is:

CAPTURE

Capture an item by opening the Neat mobile app and tapping Take a Photo. Place your item on a contrasting background so the digital technology can easily find the edges of your document. Hold the viewfinder above your item, and tap capture. You’ll notice the item type “auto-detects” or defaults to receipt.

Tap to easily change that to invoice, statement, or check, and select confirm.

Alternatively, you can import an image of an item from your camera roll. Again, open the Neat mobile app and select Import.

 

This action opens your photo gallery. From here, select the items you’d like to import into Neat for matching.

Again, change auto-detect or receipt to the applicable item type, and tap confirm.

SCAN

Another option is to scan in your documents. Start by installing the free Neat Scan Utility for desktop.

Connect your Neat (or other TWAIN-compliant) scanner to your computer. Then, open the Neat Scan Utility you installed, and select your connected scanner.

Load an item into the scanner, and watch it appear on your screen. Your newly added item automatically goes into your file cabinet, under the label Needs Review.

 

EMAIL

Finally, and perhaps quickest of all, you can email your items into Neat. When you sign on with Neat, you receive a distinct @neatcloud.com email address. Use it to email items to yourself for processing, matching, and reconciling. Here’s how:

First, find your unique email address. In the upper-right corner of your dashboard, find and click on your name. Select user settings. That’s where you’ll find your special Neat email address.

Now, when you make a purchase online and receive an email confirmation, simply forward it to your NeatCloud email inbox. Voila! Just like that, it joins your other transactions in your Neat file cabinet.

Similarly, if you’re out and about and purchasing items or services in person, choose “email me my receipt” at point-of-sale terminals instead of grabbing a physical receipt.

Match your bank transactions with your imported documents

Business owners or their bookkeepers traditionally perform the final step, which involves matching all of the records from your bank to the items you’ve imported into Neat. Thankfully, this step — which is conventionally known as the most time-consuming one — is now digitized.

First, locate and open any transaction from your internal ledger (that is, your list of transactions in Neat). Notice how Neat suggests matches between records and images. Your job now is to simply confirm pairs. You’re verifying that the “In-Document Identification” technology did its job and extracted every data point correctly. Over time, you’ll notice the process requires less and less of your attention, since it’s 99% accurate to begin with, and, over time, learns how you tend to prefer organizing things.

Check out this streamed transaction. Notice the way it’s automatically coupled with its line items (and matched documents) in Neat:

As you can see, small-business bank reconciliation has changed. What was once a stressful monthly event is now an ongoing process that gives more than it takes. And, for the first time, continuous bank reconciliation provides real-time insights and decision-making power.

Stay on top of your company’s financial health with real-time bank reconciliation

Recall the two reasons accounting has always been cyclical: first, too few daily transactions made routine reconciling unworthy of the coffee refill the task required; second, any lapse longer than a month allowed procedural problems to persist and fraud to fester.

Real-time, automatic bank reconciliation answers both those and more: as you can see, it also handles the accompanying problems that came with traditional monthly closing. Start your free trial of Neat today to experience how this unique tool puts you (and keeps you) back on top of your company’s financial health.