Invoice reconciliation made easy - discover what it is and how you can do it yourself without having the pay an accountant. Get your figures right, balance the books and keep your cash flow steady and optimized.

1. How you can do invoice reconciliation the easy way
Fit your figures together with less
fuss

2. If you've ever heard that saying before, it's easy to
understand how and why invoice reconciliation is so
important.
If you recognise this saying, but don't really know what it
means, you're in the right place. Even if you don't technically
work in accounting, but you deal with finances, knowing
what invoice reconciliation is about is a must.

3. What is Invoice Reconciliation?
It's the process of matching the information on bank
statements to the invoices you have going out and
coming in.
If you don't get organised fast, keeping track of invoices
you're owed and bills you need to pay can become
both chaotic and a nightmare. You need to keep on
top of who has and hasn’t paid you and which bills of
yours are outstanding.
In addition, reconciling invoices is a key accounting
action – it makes sure all accounts are kept clean &
tidy, and every entry in a book is matched correctly.

4. Putting in the data you need for doing the reconciliation shouldn't be hard work or
take lots of time. Not everyone who runs a business has the time (or interest) in
staring at figures and spreadsheets. To make this process even easier, the best solution
is a piece of software that matches payments on your bank statement to your open
invoices semi-automatically.

5. Now, if you had to go each item on the bank statement individually
reconciling them with each invoice one at a time by searching through all
open invoices, it’s easy to see how this could get tedious. Ideally, you want a
system that lines up all invoices in one place with the best matching payment
entry and you reconcile them all in one go. Say “yes” once! Think of it like a
strike when you’re bowling – it would be an absolute pain putting the pins out
one at a time and throwing the ball again and again. And what if the system
congratulates you on your progress and time performance?

6. My Numbers Don't Match
It would be ideal if all the amounts on your
bank statement matched your invoices exactly,
but so would be winning the lottery or world
peace. But don’t be stressed if the numbers
don’t match up. This could be for a number of
reasons, but never fear - all have solutions just
waiting to be chosen.

7. Typically, there are five major reasons for invoice mismatches:
1. Maybe you’ve given a discount for early payment.
2. There could be bank charges, like for currency exchanges or
international payment fees.
3. Or perhaps the remaining balance will be paid later?
4. There could be an invoice or expense note missing in the system
5. Lastly (and unfortunately), you realize the invoice will never be
completely paid so the unpaid part needs to go as a loss in your P&L
statement.
There is a number 6...
6. A client has paid too much for an invoice and it can go as extra
profit in your P&L.
But, number six would only really happen in your dreams, so we're
back down to five reasons!

8. Ideally, as soon as you've identified the reason you should deal with it
straight away by taking the right action (file the invoice, write the
expense note, write down the difference as a loss, etc.)

9. Although they're the main ones, there are probably more
than just the five scenarios we've mentioned. It's good
practice is to identify extra ones that might occur and add
them as well.
The outstanding amount should automatically show up on
your original invoice. And, hey presto, that’s partial
reconciliation for you!
Whether or not you're an accountant, dealing with invoice
reconciliation is crucial - we hope this information will help
you on your way!

10. A few other points to remember about
invoice reconciliation
• Reconciliation helps you stay on top of your
company's most valuable asset - cash!
• Proper reconciliation will help you spot any fraud
- but to be effective, the person who does the
accounting and withdraws money should be
different to the person doing the bank
reconciliations unless it’s you that does all these
things.
• Use a system that allows you to make partial
reconciliations, keep invoices open and lets you
add whatever extra fields you need.

11. Reconciliation really can be done in no time at
all. Why don't you have a go yourself using our
Odoo demo at
https://demo1.odoo.com/web#action=accoun
t.action_bank_reconcile