In automated clearing, Bank statement details are automatically matched and reconciled with system transactions. Learn how this process works and what are the perquisites to enable the same.
Automated Clearing
In automated clearing, Bank statement details are automatically matched and reconciled with system transactions.
This method is ideally suited for bank accounts that have a high volume of transactions.
The following three are the basic steps are involved in Automated Clearing Process:
1 Map Transaction Codes
Bank statement lines are coded to identify the type of transaction the line represents. Since each bank might use a different set of transaction codes, the first step towards automatic clearing is to map each code that is used by a particular bank for which the transactions need to be reconciled.
2 Matching Criteria
Automated matching can only be done if you can find a common identifier between the transaction details as recorded in your sub ledgers and the bank statement.
Automated systems generally match a bank statement line against a payables payment transaction, receivables receipt transaction, payroll disbursals and miscellaneous transactions using a transaction number (such as the payment or deposit number), bank account, amount, and currency.
3 Reconciliation Tolerance:
Reconciliation tolerances are defined in the system as percentages and/or amounts.
If tolerance is defined then the difference between the statement line and sub-ledger transaction line will be auto-reconciled when it is within the tolerance limit. The system also creates a miscellaneous transaction for the difference between the remittance batch amount and the bank statement line.
How the inflow and outflow of cash is linked to the operating cycles of the business? Learn the cash management process in an enterprize and it's key components.
Unravel the mystery behind clearing. Why we use clearing accounts. Find the relevance of word "Clearing" in business context.
The objective of Financial risk management is to protect assets and cash flows from any risk. Treasury function works to accurately assess financial risks by identifying financial exposures including foreign exchange, interest rate, credit, commodity and other enterprise risks. Learn about the various risks that are managed by treasury.
Effectively using cash management with trade finance products brings tangible benefits to both corporates and financial institutions.Learn the various benefits of cash management process.
Technology has enabled the treasury function by providing various solutions to manage it's complicated tasks. This article explains various types of treasury management systems available in the market.
Introduction to Bank Reconciliation Process
These set of articles provide a brief introduction to Bank Reconciliation Process. This topic not only discusses the meaning of bank reconciliation process but also discusses how this process in handled in new age ERPs and Automated Reconciliation Systems.
The topic for this lesson is "Introduction to Cash Management Process". We start with the learning objectives for building requisite functional expertise in cash management process.
In automated clearing, Bank statement details are automatically matched and reconciled with system transactions. Learn how this process works and what are the perquisites to enable the same.
What is Invoice to Cash Process
In this article, we will explore the business process area known as; Invoice to Cash; Also known as I2C. Learning objectives for this lesson are: Meaning of Invoice to Cash Process; Sub Processes under Invoice to Cash; Process Flow for Invoice to Cash; Key Transactions Fields; Key Setups/Master Data Requirements.
Treasury has increasingly become a strategic business partner across all areas of the business, adding value to the operating divisions of the company. Managing activities that were traditionally carried out within the general finance function. Learn about the drivers for this change.
© 2023 TechnoFunc, All Rights Reserved