Account Reconciliation: Insights from citizenM's Johan Palmboom

Who are you and what is your position?

My name is Johan Palmboom, I am the Head of Finance Transformation at citizenM. I am proud of my background in finance and consulting, and I have been with citizenM for 8 years now. Before officially joining the company, I advised the company as a consultant. My career at the company began with responsibility for accounting and reporting. However, I soon noticed that there was a strong need for change and transformation within our finance department. This insight led to forming a dedicated team dedicated to transforming the finance organization and optimizing our systems, processes and strengthening our team.

How is your position related to account reconciliation?

I work at citizenM, a fast-growing organization with several hotels worldwide. Due to the continued growth of our business, we started automating our consolidation process through CCH Tagetik in 2015. Before this switch, our finance teams spent a lot of time manually reconciling data in Excel. Given the high transaction volumes within the hospitality industry, it was necessary to accelerate this process and improve our control over it. To this end, we also implemented CCH Tagetik's software for Account Reconciliation and Transaction Matching in early 2023.

Have you ever done a manual account reconciliation yourself?

Yes, in my previous role as head of accounting and reporting, I was personally involved in manually performing account reconciliations. We used Excel and Google Drive for this. It was challenging to manage the files and keep track of the reconciliation status, especially given citizenM's international presence. But after we implemented CCH Tagetik, the process was significantly standardized and simplified.

What do you see as the pitfalls of account reconciliation without software?

One of the biggest pitfalls is undoubtedly keeping files scattered, leading to a lack of visibility into reconciliation status. This creates significant challenges, such as increased time investment and intensive manual work to gain a clear understanding of pending cases. By switching to account reconciliation software, we integrate all information on a single platform. This not only provides real-time visibility into the status, but also allows us to focus on the exceptions, which greatly increases effectiveness. With a continuous accounting process, you can continuously improve and adjust the system during the process. This gives the flexibility to optimize the rules of the game as we go along, which improves the turnaround time and quality of reconciliation processes. In the end, it helps us achieve the bigger goal: faster, high-quality closure.

We read in marketing materials that software-based account reconciliation and/or transaction matching saves a lot of time. What are your experiences in practice?

I have found that using transaction matching at the most detailed level does indeed save a tremendous amount of time. By fully automating it, transactions are seamlessly matched. This means that every single financial transaction - take as an example something as simple as buying a drink at a hotel - is captured in the system and automatically reconciled with corresponding items such as revenue and cash flows. If there is a discrepancy in the reconciliation, it is immediately visible. This allows us to act proactively and remain in control of our finances, ultimately leading to significant time savings at the monthly close."

What are your experiences regarding the implementation of the CCH Tagetik solution for account reconciliation and transaction matching?

The system was successfully implemented, but the change in our way of working and the adjustment of our corporate culture took more time than anticipated. Especially for the financial controllers, it was switchover; they had to adapt to a new way of working by relying on data and transactions from different systems. We approached the implementation process step by step, which ultimately led to a successful gradual transition. It is indeed a matter of changing mindsets within the accounting teams. You have to move away from your old, familiar Excel sheets and start relying more on automation. That can be challenging. Initially we had underestimated the impact of this, but eventually we got there with small steps, thanks in part to the efforts of change management.

What would you say to a financial professional considering automating account reconciliation?

I recommend that financial professionals start with small steps. Take advantage of automation to increase speed in your work processes. It is crucial to collaborate and transition gradually to ensure a smoother transition to account reconciliation automation. The step-by-step approach is essential to build knowledge without becoming overwhelmed; it requires a change of mindset within accounting teams. It is important to recognize that automation enables you to work according to the continuous close principle. This lays the foundation for further improvements in the turnaround time of your processes by applying Artificial Intelligence to your continuous close Process at a later stage. In effect, you move away from periodic batch processing to continuous accounting. If you compare: imagine having part of your house cleaned daily by a robotic vacuum cleaner, so that you only have to touch up the corners before receiving guests during the reporting period.

Want to know more about account reconciliation and corporate reporting?

On March 28, we are hosting The Future of Corporate Reporting, the event for the finance, sustainability and corporate reporting professional who wants to be prepared for the future of this field. Register via this link!