Metric Definition
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Reconciliation time
Reconciliation time measures the total hours or days required to match and verify transactions across financial systems during the close process. It captures the effort spent ensuring that spend management data, bank statements, credit card statements, and the general ledger all agree, and is a key driver of overall close speed.
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What is reconciliation time?
Reconciliation time captures the labour and elapsed time required to verify that all financial records agree. This includes matching credit card transactions to receipts and GL postings, verifying bank statement entries against AP records, resolving discrepancies between the spend management platform and the ERP, and investigating unmatched items.
For many finance teams, reconciliation is the most time-consuming part of the monthly close. Organisations processing thousands of card and payment transactions can spend 40 to 80 hours per month on reconciliation alone. Reducing this time frees the finance team to focus on analysis and strategic work rather than transaction verification.
How to calculate reconciliation time
Reconciliation Time = Hours Spent on Reconciliation Activities / Number of Close Cycles
For example, if the finance team spends 60 hours reconciling transactions during the monthly close, the reconciliation time is 60 hours per cycle. Break this down by reconciliation type: card statement reconciliation, bank reconciliation, intercompany reconciliation, and AP reconciliation. This decomposition shows which areas consume the most effort and where automation will have the greatest impact.
How to reduce reconciliation time
Automate transaction matching by connecting spend management, banking, and accounting systems through real-time integrations rather than manual exports and imports. Implement continuous reconciliation throughout the month rather than batching all verification into the close period. Improve upstream data quality so that transactions arrive in the GL with correct codes and complete information, reducing the number of exceptions that require investigation. Use automated exception reporting to surface only the items that need human attention rather than reviewing every transaction manually.
Related metrics
Accounting Integration Accuracy
Financial Metrics
Metric Definition
Accounting Integration Accuracy = (Transactions Synced Without Error / Total Transactions Synced) x 100
Accounting integration accuracy measures the percentage of transactions that sync correctly between the spend management platform and the general ledger or ERP system without requiring manual correction. It is a critical indicator of data pipeline quality that directly affects month-end close speed and financial reporting reliability.
Payment Cycle Time
Invoice to payment speed
Financial MetricsMetric Definition
Payment Cycle Time = Average (Payment Date - Invoice Receipt Date)
Payment cycle time measures the average number of days between receiving a supplier invoice and completing the payment. It is a core accounts payable metric that directly affects vendor relationships, early payment discount capture, cash flow forecasting accuracy, and the overall efficiency of the finance function. Shorter payment cycles strengthen supplier trust and often unlock cost savings, while excessively long cycles can damage relationships and lead to supply disruptions.
Days Sales Outstanding
DSO
Financial Metrics
Metric Definition
DSO = (Accounts Receivable / Total Credit Sales) x Number of Days
Days sales outstanding (DSO) measures the average number of days it takes a business to collect payment after a sale is made. It is one of the most important cash flow metrics for any business that extends credit to its customers, directly affecting working capital efficiency and the ability to fund operations from operating cash flow rather than external financing.
Accelerate your financial close
Build a metric tree that connects reconciliation time to close speed and finance team capacity so you can see how process automation frees your team for strategic work.
