The reconciliation is done … or is it?

Reconciliation checkboxes aren’t a close, especially when “reconciliation” really means transactional matching.

Most transactional reconciliation tools rely on dashboards and checklists to show progress across the financial close. Once data matching flags items as “matched,” the system often marks the task complete. From the surface, the close process appears controlled. Dashboards turn green. Workflows advance. The reconciliation looks finished.

But checklists are driven by task completion, not data movement or financial accuracy, and a “complete” status in the reconciliation tool doesn’t mean the data has been updated or validated. It only means someone flagged a match. In the financial close process, completion should mean corrected account balances in the general ledger instead of a visual signal in a reconciliation solution. This distinction matters during the month-end close, when manual processes and unresolved discrepancies can quietly accumulate.

That gap misleads CFOs into thinking issues are resolved when they are not. One healthcare controller learned this the hard way. Their team believed reconciliations were complete across bank reconciliation, sub-ledger activity and accruals. The dashboards showed no open items. Yet during an audit, $2.6 million in accrual-related journal entry corrections were still sitting in email threads, never posted to ERP systems. The financial statements looked clean on paper, but the underlying financial records told a different story.

Finance Automation by Redwood prevents this false confidence by tying reconciliation status to execution. The platform does not allow the close process to advance until required journals are created, approved and posted inside SAP to align transactional reconciliation with real financial outcomes.

“Matched” doesn’t mean corrected

In transactional reconciliation, data matching is detection, not correction. Auto-match logic highlights discrepancies between bank statements, bank feeds, bank transactions, credit cards and bank accounts, but it doesn’t fix them. Many reconciliation tools stop once discrepancies are identified, which forces finance teams to resolve issues elsewhere.

That “elsewhere” is typically spreadsheets or Excel templates used to calculate correction journals. These manual processes introduce human error, increase manual effort and slow the account reconciliation process, especially in high-volume environments handling large volumes of transactions across multi-currency entities. This time-consuming workaround introduces risks that include:

• Added burden on finance and accounting teams already stretched thin
• Late-cycle changes that disrupt the month-end close
• Lower reliability in financial reporting and audit trails
• More exposure to error-prone, manual processes

Validation functionality inside transaction-level reconciliation tools rarely touches the actual SAP posting layer. As a result, the system cannot reconcile accounts end to end. In the healthcare example, unmatched accruals required correction journals before depreciation could run. Because those journals were not posted, downstream close management tasks stalled, consolidation was delayed and financial reporting timelines slipped. The reconciliation tool checked the box, but the close process broke.

Finance Automation closes this gap by linking transaction matching directly to journal execution. When reconciliation logic is satisfied, the platform can automatically create, route and post journals based on configured rules and approvals to eliminate spreadsheet dependency.

Resolution depends on actual journal execution

A reconciliation is only complete when correcting entries are posted to the general ledger. Visual confirmation without execution is meaningless. Yet many reconciliation tools cannot natively see whether journals tied to reconciliation items are even in flight, let alone posted.

Auditors know this weakness well. During the healthcare audit, the team was asked to prove when corrections posted, with timestamps, audit trails and supporting documentation. Without proof of posting, the team couldn’t explain how those corrections affected the broader financial data or when adjustments were reflected in reporting. The reconciliation system showed completion. The ERP showed nothing. Internal controls existed on paper but not in execution.

Finance Automation enforces reconciliation completeness by embedding the entire discrepancy resolution process into ERP-native execution. It tracks discrepancy detection, journal creation, approval workflows, posting and reversal where needed. As a result, teams get audit-ready financial records with full traceability that reduce risk management exposure and support accurate decision-making.

Why most tools create journal gaps instead of closing them

Most tools separate anomaly detection from journal processing. That architectural split forces accounting processes to span multiple systems and modules, which creates manual work outside the platform. Corrections are calculated in Excel, routed through email and posted manually through ERP interfaces or APIs that break audit trails and slow down downstream SAP jobs. Even when teams try to fill the gaps manually, the process remains error-prone because they’re relying on disconnected handoffs between people and systems.

This fragmentation impacts cash flow visibility, forecasting accuracy and consolidation timing. When account balances are corrected late, pricing assumptions shift and financial management becomes reactive. The reconciliation solution reports completion, but the financial close continues behind the scenes.

Finance Automation addresses this structurally. Built as a cloud-based orchestration layer, it unifies reconciliation, journal entry and close management in a single platform. It integrates directly with data sources, bank feeds and ERP systems and removes the journal entry automation gaps that reconciliation tools leave behind by streamlining the entire close process.

Use reconciliation to trigger real action

Finance Automation transforms transactional reconciliation from passive review into active resolution. Where traditional account reconciliation software promotes visibility and certification as its key features, Finance Automation embeds execution directly into the ERP layer so reconciliation actually results in posted journal entries. Finance Automation is the leading record-to-report (R2R) orchestration platform and is designed to execute the financial close rather than monitor it.

When reconciliation logic confirms discrepancies, Finance Automation automatically generates correcting journal entries, applies approval workflows, validates posting rules and posts directly to SAP. The reconciliation process becomes a trigger for real action instead of a reporting exercise. Account reconciliation tools no longer stop at visibility. They drive execution.

In the healthcare controller’s case, this would have changed the outcome entirely. The $2.6 million in accruals would have been posted in real time, depreciation would have run on schedule and audit questions would have been answered with system-backed evidence. Finance and accounting teams would have spent less time chasing emails and more time closing with confidence.

By orchestrating close management, automated reconciliation and journal execution across ERP systems, Finance Automation reduces manual processes, improves scalability for enterprise organizations and delivers real-time insights through a user-friendly platform.

If your dashboards look clean but your journals live in email, your reconciliation is not done, and your journal entry close is not really automated. Test your journal automation maturity and see how your reconciliation breaks down into manual journals.