Automated Clearing
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.
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