Driving Process Efficiencies in the Financial Close with Oracle Transaction Matching

Oracle Account Reconciliation has two feature sets; Reconciliation Compliance and Transaction Matching. In this blog, I am going to focus on the Transaction Matching feature set of Oracle Account Reconciliation to provide some clarity into the key benefits of the solution.

Transaction Matching Reconciliations for Financial Services Companies

Often, reconciliations are thought of as the monthly sub-ledger to ledger or roll forwards that are performed to validate balance sheet accounts as part of the reconciliation compliance process. Transaction matching supports the reconciliation compliance process by validating that the underlying transactions are appropriate and accounted for accurately within sub-systems and ERPs. While transaction matching does not typically apply to all accounts within a company’s chart of accounts, it does apply to those accounts with large volumes of transactions in accounts that either adds complexity or risk to the reporting of financial statements or have a risk of fraudulent activity.

For financial service companies, these accounts are often the high visibility accounts, including

• operating and investing cash
• investment portfolio (i.e. fixed maturities, equity securities, short-term investments, etc.) for purchases, sales, investment income, etc.
• interface (i.e. policy and reinsurance admin system, claims management, loan management, and other operational systems to ERP)
• intercompany
• loans receivable
• suspense
• other similar accounts

Those performing the reconciliations are working with millions of transactions in an attempt to validate that the systems accurately reflect one another, no fraud has occurred, and, if necessary, adjusting entries are recorded in a timely manner. As a result of banks, insurance companies, and other financial services companies working with a large volume of transactions, multiple source systems, and the frequency (i.e. daily, weekly, monthly) of the process, transaction matching is a time-consuming task that results in companies having a team of resources responsible for the reconciliations.

What is Oracle Transaction Matching and What are the Benefits?

The Transaction Matching feature set of Oracle Account Reconciliation automates the labor-intensive, detailed reconciliations into a centralized solution that has the ability to integrate into the Reconciliation Compliance feature set. The solution manages highly complex transaction matching criteria by offering multiple match types (i.e. one to one, one to many, many to one, and many to many) and multi-matching rules (i.e. auto-match, suggested match, and manual match) to provide a systematic process that provides real-time visibility into matched and unmatched transactions.

There are five key benefits of incorporating Oracle Transaction Matching into your reconciliation process:

1. Process Standardization – Transaction Matching creates structure around the reconciliation process by utilizing multi-match types and match rules to systematically reconcile transactions. This allows for a consistent approach period over period to ensure matches are accurate and unmatched items are being identified to allow for further analysis and action to be taken.
2. Process Optimization – Automating the transaction matching process, allows those performing the tasks to spend less time on the processing of data and matching of transactions and more time focused on unmatched transactions and exceptions. Additionally, with Transaction Matching, you have the ability to export journals with transaction data to your ERP to ensure missing entries are appropriately recorded.
3. Multi-Source Integration – As the transaction matching process involves multiple data sources, Transaction Matching can integrate any data source into the reconciliation process. This eliminates the burden on the reconciliation team to extract various slices of data manually and input the data manually into Excel or Access files in order to perform the reconciliations.
4. Scalability – Over time, organizations will change via mergers and acquisitions, new investment managers, new lines of business, as well as through technology and process change. With Transaction Matching, you are able to seamlessly integrate new data sources (i.e. ERPs and operational systems), accounts, entities, reconciliations, etc. into your process without interruption. This ensures that reconciliations continue to occur without impact to process or controls.
5. Integration to Reconciliation Compliance – The transaction matching process is used to mitigate risk to the financial close process, including potential fraud and monthly reconciliation compliance. Transaction Matching integrates directly into Reconciliation Compliance to support the monthly compliance needs of organizations.

Transforming Your Transaction Matching Process

Oracle Transaction Matching removes the manual activities from the process by providing standardization and automation, which allows organizations to spend more time focused on unmatched transactions and exceptions. The ability to match data more efficiently drives hours and days of savings in the overall process, while also providing auditors with the details necessary to ensure unmatched amounts or exceptions are effectively being tracked down, validated, or appropriately remediated. With reporting timelines tight, Oracle Transaction Matching will shave days off the transaction matching process and provide a solution that supports the integrity of the financial statements.

Ask yourself these questions:

• Do you have a team of resources spending countless hours on the transaction matching reconciliation process?
• Is your company able to systematically capture unmatched transactions?
• Are you able to integrate your transaction matching process into your reconciliation compliance process?

Alithya’s functional and technical knowledge of the accounting close, transaction matching, and reconciliation compliances processes provides our financial services clients insight and leading practices that have our clients automating controls, eliminating redundant processes, and focused on driving efficiencies in their financial close processes.

For comments, questions, or suggestions for future topics, please reach out to us at infosolutions@alithya.com.  Visit our blog regularly for new posts about Cloud updates and other Oracle Cloud Services such as Planning and Budgeting, Financial Consolidation, Account Reconciliation, and Enterprise Data Management.  Follow Alithya on social media for the latest information about EPM, ERP, and Analytics solutions to meet your business needs.