Better Monthly Accrual Reporting: Automation, Integration, and Stability

Building a Reliable Monthly Accrual Report: Overcoming Challenges and Implementing Solutions

An accrual report helps businesses and investors understand the company’s true financial position. It includes future income and expenses, providing a more comprehensive view of its financial health.

Generating a monthly accrual report is a crucial process for financial accuracy, and as usual, it comes with challenges. At Setronica, we faced and successfully addressed major difficulties:

full automation with ensuring all transactions, invoices, and expenses were recorded for the correct period;
overcoming integration difficulties;
and ensuring stability and delivery guarantees.

So, here’s how we dealt with these challenges.

1. Full automation

We are an IT company, so it is a challenge for us to minimize our overheads and automate processes for our customers as cheaply and efficiently as possible. We fully understand that custom reporting is a headache for companies providing procurement services. It is simply impossible to cover all cases, and it becomes an agreement with customers with some concessions on both sides. As a result, it limits or overcomplicates the process.

In such cases, I would expect the agonizing to stop and the kettle to be emptied. Sometimes, it is impossible to do this from the outset. But we must do it once we have recognized the gap. At that moment, we have to compare possible ways and make a new decision that will satisfy everyone.

In our case, we decided that it would be much cheaper to have a document processing queue outside the main service, which would allow us to cover all of our customers’ needs. Let’s call it a custom service. This is something that can be reused for other customers as a bonus.

Documents requiring external processing are flagged in the main workflow. The custom service then regularly checks for and handles these flagged documents.

We can do what we need to do or what the customer expects. Once everything’s done, we can unblock the document workflow by using a proper API call. This allows all documents to be routed through the custom service and the process to be fully automated.

2. Ensuring accurate period recording

One of the biggest issues was ensuring that all financial transactions were recorded in the correct accrual period. Inconsistencies in document processing led to gaps that required frequent manual adjustments.

To address this, we introduced a blackout period at the end of each accrual cycle. During this time, no new documents were processed, allowing the finance team to finalize reports without additional transactions appearing unexpectedly.

We can easily configure the custom service to ignore documents during this blackout period and even provide a way for the customer to visualize and manage it. As you can see, we simply defer processing for each document, and no one gets lost.

This approach has significantly improved the accuracy and completeness of our accrual reports. It completely eliminates human error and doesn’t require agreements between companies to guarantee the absence of any new documents during this period.

3. Overcoming integration difficulties

Our accrual reporting system had to pull data from multiple sources, including accounting software, invoicing systems, and procurement platforms. Initially, system discrepancies and data inconsistencies made this process unreliable.

To overcome this, we integrated multiple systems using APIs to ensure a seamless and automated flow of data. By establishing standardized data formats and validation rules, we minimized errors and improved reporting efficiency.

Our decision to do this as the custom service gives us maximum flexibility to apply more validation rules, transform data, and enrich using other data sources in the best way. It is also much cheaper for the customer to discuss changes, find a solution, and implement it.

4. Ensuring stability and delivery guarantee

Reliability was another key concern, as any failure in data transmission or processing could lead to inaccurate reports. Each system had its own vulnerabilities, and we needed a robust solution to prevent disruption. We conducted a thorough analysis of each system’s vulnerabilities and added layers of stability to our integration process.

These included error handling mechanisms and immediate or deferred retry of document processing. The main aim is to roll back any document with an exception to its initial state, to repeat it later from one side and avoid any duplication from another side.

This doesn’t mean we don’t need a monitoring system because some corner cases may still occur, and changes in systems may bring new problems.

So, we need to detect and resolve issues before they affect the reporting process or as soon as they occur to avoid delays in data processing. It always means reputational risks and can result in lost money.

Final thoughts

We have improved our monthly accrual reporting by automating the process, using APIs for system integration, and enhancing stability measures. These improvements have reduced the manual workload and improved the accuracy and timeliness of financial reporting.

So I would say that we have saved, and continue to save, a lot of our time and our customers’ time. And we do this for all our customers because we understand what they expect and appreciate us for.

If you’re facing similar challenges, contact us via the form below, and we’ll find the solution that fits your business.

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