To better centralize and coordinate its global treasury operations, a multinational corporate wanted to upgrade the treasury management system (TMS) used in its UK-based international treasury, and add two large in-country entities.

To ensure synchronization of sub- and general ledgers for the new entities, the firm asked SkySparc to develop an automated reconciliation process between parallel records held in the TMS’s accounting module and the firm’s enterprise-wide general ledger (GL) system.

SkySparc made plans to configure the Reconciliation Board module of its OmniFi platform to facilitate the required reconciliation processes, covering both daily accounting activities and month-end closing.

For any large firm with multiple entities and counterparties, TMS migration is complicated by the large amount of connections and contingencies. In this case, severe challenges arose around the in-house team’s efforts to implement and test an interface to support data flows between the TMS and the GL platform. This initiative had the potential to impact the scope and the timelines of the overall migration project.

Normally, a reconciliation routine of the kind SkySparc started to build for the client serves primarily as a safety measure, ensuring data flows between two established systems are in synch and quickly flagging discrepancies. The process is typically iterative, with a prototype being refined using historical accounting data. But no such data existed in the newly-configured TMS’s accounting module because the interface to the GL had not been finalized before the deadline for delivering the reconciliation solution.

As well as building automatic reconciliation, we ended up supporting the testing project, using OmniFi to trouble-shoot deviations and identify discrepancies. - Marcus Gullers, Head of Product Management, SkySparc

The reconciliation routine and underlying logic used by OmniFi to transform, enrich and map data across the TMS and GL platforms had to be developed using working assumptions about the set-up of the new TMS’s accounting module.

SkySparc proposed that OmniFi’s prototype routine should first serve as a testing mechanism for the TMS/GL interface, before assuming its role of monitoring and reconciling entries across the platforms.

As the client team got closer to completing TMS implementation, OmniFi tested the new interface, highlighting problems with its outputs, necessitating fixes to the interface, the structure of the accounting data, and the reconciliation routine itself. The project’s multiple challenges and short time frame were overcome by a close working relationship across a small, dedicated core project team supported by rapid deployment of SkySparc’s R&D resources.

“Normally, we build reconciliation routines between two systems whose entries match up on a regular day. In this case, some entries were not being received at all, others received incorrectly,” explains Gullers. “As well as building automatic reconciliation, we ended up supporting the testing project, using OmniFi to trouble-shoot deviations and identify discrepancies.”

To handle this role, flexibility was needed. OmniFi’s Reconciliation Board typically only reconciles one day’s entries at a time, but it was quickly upgraded to handle multiple days’ data. Whilst other systems might struggle to quickly design, test and deploy functionality upgrades, most were made to OmniFi without specialist technical assistance, thus avoiding costly project delays.

“We soon began to realize the vast scale of data volumes involved. OmniFi was used to reconciling perhaps 10,000 rows of data, but the client needed us to process around 50-100,000 rows, across many columns, which meant reconciling 50 million data points,” adds Gullers. There were two key reasons for the unexpectedly large scale of data processing required. First, the central treasury implementation team did not have full oversight of country-level accounting data volumes. Second, the multiple interface iterations generated large quantities of additional data, with many reversals required to fix incorrect entries.

“We asked SkySparc’s R&D department to quickly deliver a new iteration of the Reconciliation Board,. Now OmniFi deals with millions of accounting records and more than 100 million data points in seconds, rather than minutes.” - Marcus Gullers, Head of Product Management, SkySparc

Beyond its unexpected interface testing role, OmniFi’s Reconciliation Board performed its core tasks to a high standard. OmniFi connected to a previously unfamiliar accounting system, experiencing no technical barriers to reading its balance and transaction records. It also smoothly accessed all required data sources within the ASP-based TMS. To establish the reconciliation process, OmniFi quickly transformed data from both systems using complex logic.

“Lots of enrichment and mapping was required as the two systems deal with accounting quite differently, including one-to-many or many-to-many transfers,” explains Gullers. “We also used pre-defined tolerances to handle the rounding differences.” The Reconciliation Board accommodated differences in accounting practice by switching between two country-specific ‘modes’.

During and after implementation, the client used OmniFi’s new documentation and distribution capabilities, exporting results into spreadsheets for further analysis. This was particularly useful in root cause analysis of the interface implementation problems, allowing deviations to be shared easily.

“The client was not expecting to find the kind of deviations we uncovered. When they ran their first accounting export, we could immediately run the reconciliation and flag any failures in a systematic and timely fashion,” he added. “They immediately fixed the problem, rather than manually analyzing records, saving huge amounts of man hours.”

Today, the client is able to reconcile smoothly and easily, despite the large volumes and number of entities involved. The client is making savings and adding value on a daily basis through use of OmniFi’s Reconciliation Board, reducing operational risk significantly through the implementation of a robust, quality assured process for ensuring accuracy and consistency.