Problem Statement
What is Transaction matching, why is it
required and How ARCS can help?
ARCS Functionality
Oracle ARCS is a robust and secure solution for managing and automating
account reconciliation period end processes and performing large scale
transaction matching; improving efficiency and accuracy of financial processes
and statements. With ARCS key capabilities, you can perform tasks such as
automate high volume transaction matching and directly integrate with period
end reconciliations.
It is a purpose-built solution on the cloud for managing the global
reconciliation process.
ARCS offers two
modules-
What is Transaction
Matching
In layman terms
Transaction Matching itself indicates matching of transactions between
different systems.
It allows
organizations to automate the preparation of high volume, labor- intensive and
complex reconciliations. These reconciliations can then be integrated with the
tracking features within Reconciliation Compliance.
The goal of
Transaction Matching is to load transactions from one or more data sources,
match the transactions using predefined rules in ARCS, identify exceptions and
explain the exceptions. Typically, the frequency of preparing reconciliations
in Reconciliation Compliance is lesser than or equal to the frequency at which
transactions are loaded.
For example, if
balances are compared and reconciliations prepared every month, then
transactions can be loaded daily, weekly, or monthly.
You can also
use Transaction Matching for non-balance sheet reconciliations across disparate
sources, also referred to as operational reconciliations.
Examples
include system to system reconciliations, inventory/stock or share settlements,
expense reimbursements and so on.
Note
Transaction
Matching functionality is provided with Oracle Enterprise Performance
Management Enterprise Cloud Service (EPM Enterprise Cloud Service) only.
Why you need Transaction
Matching in day-to-day business
When you study
your total number of reconciliations, you will find that a small number of
reconciliations are the reason for most of the reconciliation work in your
organization. This is why Transaction Matching functionality of ARCS is a
perfect complement to Reconciliation Compliance.
ARCS has the
tools to make those complex reconciliations simpler and then integrate the
period-end results into the Reconciliation Compliance period-end process.
Benefits of
Transaction Matching
The benefits of
using Transaction Matching include the following:
- Saves the additional time and labor spent on manual preparation of
complex reconciliations
- Reduces risks and improves the quality of the reconciliation
process
- Removes inefficiencies in the process of preparing reconciliations
- Reduces human errors and speeds up the reconciliation process
- Reduces time taken for financial close
- Improves trust and reliability while providing accurate numbers
- There is no need to make any changes in ERP system for source data
extraction as it adapts existing environments
- Millions of transactions can be matched in minutes
- It offers competitive advantage as organizations can deploy
resources to high value activities such as analytics
Scenarios for Which
Transaction Matching is Beneficial
- Balance sheet-related
reconciliations
- Suspense and Clearing
Accounts
- Intercompany
- Cash
- Credit card
receivables
- Detailed Subledger
reconciliation
- Operational,
off-balance sheet, reconciliations
- System to System
reconciliations (which typically involve two third-parties whose accounts
must be in sync with each other)
- Stock or share
settlements
- Expense reimbursements
Transaction
Matching Workflow
The workflow for using Transaction Matching
includes multiple steps that must be performed for each account reconciled. The
steps must be repeated each time new data becomes available.
Transactions can be imported
from any source. The import process can be run on demand or scheduled to run automatically.
The Auto Match process matches transactions
according to predefined rules and users need to focus only on the exceptions.
Auto Match creates:
- Confirmed Matches, where no further action is required
- Suggested Matches, where the user can either confirm or discard the
match.
Period-end reconciliation is performed at a
frequency that depends on your business requirement.
Reconciliation
Methods for Transaction Matching
Transaction Matching
formats are based on one of the following reconciliation methods:
Balance comparison
with Transaction Matching
This method is used to compare balances and match
transactions between two distinct sources, such as source systems and
subsystems.
For example-
- Match point of sale
system vs a merchant transaction system, or
- Match the
transactions between accounts payable and journal entries within the general
ledger.
Account analysis
with Transaction Matching
This method is used to match transactions within a
single data source.
For example-
Debit and credit matching. The most common use case
is if you are netting off transactions within a single data source to determine
the net balance for an account, such as a clearing account.
Transaction matching
only
This method is used primarily to match transactions
between two systems, without a period-end reconciliation.
Thank you!
