Credit Card Reconciliation
Verifying the integrity of data between credit card statements—or other associated reports from merchant services providers—and a company’s internal financial records are what credit card reconciliation is all about.
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Transactions are usually compared between credit card statements and the affiliated transactions within various accounts in a company’s chart of accounts. This is the first step in starting this process and it is crucial to ensure that credit card statements and balances are correct and accurate.

If there are any discrepancies or misalignment of information, an investigation ensues to determine the appropriate actions to be taken. It may be an honest mistake in most cases and easily rectified with corrective measures, but it may also reveal more sinister intentions from within the company and allow management to take action swiftly before a major fraud takes place.
What is the Process for Credit Card Reconciliations?

For outbound transactions to suppliers and service providers, the process begins when credit card statements arrive, or after the close of a financial period. Each transaction on the credit card statement is examined and matched to the company’s internal records to make sure there are no overpayments, the expenses are legitimate and supported by invoices or receipts, and to make sure payments are not overdue.

For inbound credit card payments from clients and customers, the company’s accountants follow the same process in reverse, and that is to make sure the company’s sales records match the disbursements paid to the company by the credit card provider (minus the bank charges or fees).
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Credit Card Reconciliation for Retail Businesses

For companies with retail stores, it is important to perform credit card reconciliation on a daily basis, typically after the final transaction of the day. As the volume of credit card transactions is most likely higher than businesses without retail stores, it is advisable to reconcile credit card transactions frequently to catch discrepancies immediately.

Ideally, the process should include totalling the amounts on each individual transaction slip and matching it to the amount received by the credit card merchant. This step will account for every individual slip and makes for a much more thorough reconciliation process.

However, due to the inevitability of exhaustion at the end of a long business day and the higher probability of human error, the process is reduced to matching the total amount of sale transactions via credit card in the POS system and the amount received by the credit card merchant. Simple as it may be, for a daily reconciliation process, this is often enough to maintain accuracy in daily sales records.
Verifying the integrity of data between credit card statements—or other associated reports from merchant services providers—and a company’s internal financial records are what credit card reconciliation is all about.
Image
Transactions are usually compared between credit card statements and the affiliated transactions within various accounts in a company’s chart of accounts. This is the first step in starting this process and it is crucial to ensure that credit card statements and balances are correct and accurate.

If there are any discrepancies or misalignment of information, an investigation ensues to determine the appropriate actions to be taken. It may be an honest mistake in most cases and easily rectified with corrective measures, but it may also reveal more sinister intentions from within the company and allow management to take action swiftly before a major fraud takes place.
Image
What is the Process for Credit Card Reconciliations?

For outbound transactions to suppliers and service providers, the process begins when credit card statements arrive, or after the close of a financial period. Each transaction on the credit card statement is examined and matched to the company’s internal records to make sure there are no overpayments, the expenses are legitimate and supported by invoices or receipts, and to make sure payments are not overdue.

For inbound credit card payments from clients and customers, the company’s accountants follow the same process in reverse, and that is to make sure the company’s sales records match the disbursements paid to the company by the credit card provider (minus the bank charges or fees).
Image
Credit Card Reconciliation for Retail Businesses

For companies with retail stores, it is important to perform credit card reconciliation on a daily basis, typically after the final transaction of the day. As the volume of credit card transactions is most likely higher than businesses without retail stores, it is advisable to reconcile credit card transactions frequently to catch discrepancies immediately.

Ideally, the process should include totalling the amounts on each individual transaction slip and matching it to the amount received by the credit card merchant. This step will account for every individual slip and makes for a much more thorough reconciliation process.

However, due to the inevitability of exhaustion at the end of a long business day and the higher probability of human error, the process is reduced to matching the total amount of sale transactions via credit card in the POS system and the amount received by the credit card merchant. Simple as it may be, for a daily reconciliation process, this is often enough to maintain accuracy in daily sales records.
Every SME Can Become Large
InTune Outsourcing - Creating Financially Driven Businesses and Entrepreneurs.
Every SME Can Become Large
InTune Outsourcing - Creating Financially Driven Businesses and Entrepreneurs.

About InTune Outsourcing Services

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InTune Outsourcing was founded in 2007 as an outsourcing and business consultancy firm geared to the needs of small and medium sized enterprises.

Find Out More About Us


About InTune Outsourcing Services

Quick Link

Facebook


InTune Outsourcing was founded in 2007 as an outsourcing and business consultancy firm geared to the needs of small and medium sized enterprises.

Find Out More About Us


About InTune Outsourcing Services


InTune Outsourcing was founded in 2007 as an outsourcing and business consultancy firm geared to the needs of small and medium sized enterprises.

Find Out More About Us

Facebook