Build vs. Buy?

The build vs buy decision is one that finance, product and engineering teams must frequently make to set their teams and business on a path to success. Every business is different and will have different attitudes towards this decision, but it is important to consider all options before embarking on a path that may not be best. As a former Product Director with a decade of experience in product management, I can admit to getting the build vs buy decision wrong in the past. When you're working with a talented and ambitious team and stakeholders, it's easy to start believing that anything is possible and that maintaining control over an in-house build will yield better results, if not in the short-term, then perhaps in the long-term. Having been on this path before, this article outlines some of the factors your team should consider before embarking on building something as complex as automated reconciliations.

Opportunity Cost

This is often overlooked by teams and senior managers, and both need to be thinking about it. For teams, focusing on building something - in this case, automated reconciliations - forces prioritisation, leaving other items on the roadmap behind. Left in its wake could be revenue-generating product development that could help launch a new product, enter a new market or win a new set of clients, or perhaps some important technical enhancements to deal with scalability or make processes more efficient. Product, engineering and data teams therefore need to consider the value that other developments could bring to their stakeholders as well as the value of reconciliation automation. Senior managers should also consider all of these factors and should help steer the strategy to help teams make the best decision for the business, but they are also responsible for organisational structure. If teams are created, repurposed or otherwise reserved for a period of time to focus partly or entirely on reconciliation automation, does that deliver the most value to your business in the short and long-term?

Opportunity cost is also important for finance teams to think about. Let's say you decide to keep going with the existing manual reconciliation processes rather than investing in reconciliation automation at all. Could your finance team be more effective by focusing on other, more strategic or value add projects and tasks?


The value of automating reconciliations is clear: fewer manual processes, reduced risk and reduced costs to the finance team. The other side of prioritisation is cost, and complexity is a big part of that equation. Complexity is notoriously difficult to calculate though, especially when a team hasn't built something before. If I were to ask you to build me an automated reconciliation system from scratch, you might be able to break down some of the components required, but the chance of you being able to define everything that needs to be built if you haven't done it before is very low. The 'unknown unknowns' can add a lot of complexity and effort to a build that ultimately leads to a heavy cost and a long timeframe to deliver value. I know of teams that have spent years developing internal reconciliation systems that aren't actually solving the core problems and leave a lot of bespoke processes left over, leading to enormous costs to the business.

If specialists have built these systems before, understand what the market needs and have spent money investing in specialist product development, why not take the specialist product off the shelf?

Is building an in-house reconciliation system more effort than it's worth?


I'm a huge advocate of iterative product development that delivers value in increments and allows product and engineering teams to adapt quickly and ultimately build better products. However, there's a catch when automating reconciliations, as with other processes. Once teams have started building an automated reconciliation system, they often realise that they can only solve a few steps of the process, often consuming reports and performing some data transformation to make the datasets readable within finance teams. Either the teams then consider the automation project to be complete, or they realise that the next steps are too complex. More details about all steps in the reconciliation process can be found in our recent article 'Reconciliation Models: Pros and Cons', but in short, they can't neglect the execution of reconciliations (including transaction matching), management of reconciliation breaks and the final steps in the month end close process. Automated reconciliation solutions, whether internally built or bought from a specialist, should consider all of these steps.


Ask any product and engineering team about maintenance and they'll tell you that it can be even more costly than an initial build. If you invest a 6/7 figure sum to build out automated reconciliations, you'll have to keep spending to make sure it continues to deliver value. Do you want to add a new payment provider? Changes to your reconciliation process? A new reconciliation? Don't expect that to be covered in the initial build; these will have to be added on later. On top of that, payment providers can change their reports at short notice, as well as the delivery mechanisms with which they are sent to businesses. And worse still, if you're a growing company, you'll also have to invest in scaling the systems so that you can keep delivering value regardless of how many payments you're accepting or how many markets you're entering.

When deciding to build automated reconciliations in-house, don't just look at a 1 or 2 year time horizon of costs. As well as a high up front cost, expect moderate to high maintenance costs depending on the speed of change within your organisation.

To Buy or Not to Buy?

That is the question! If you're considering building an internal reconciliation system, you're already clear on the value that automating these processes can deliver. However, are you and your team really clear on the costs, complexity and effort that is required to build and maintain a specialist reconciliation product that keeps up with your needs?

If you're intending to invest in improvements to your reconciliations, speak to the specialists. The Equali team has experience building both in-house and customer-facing reconciliation products, so we can help you make a decision that makes the most sense for your business in the short-term and the long-term.

Martin Burn, Equali Founder

"Our mission is to give businesses control and visibility over their payments."

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