What Is Credit Card Reconciliation

How Should Discrepancies Be Dealt With

Credit Card Reconciliation Enhancements

Any discrepancies identified during reconciliation need to be disputed with the credit card processor. Records may also need to be amended in the event of any discrepancies in date, time, or item. As blackline.com notes, most merchant service providers impose a time limit on how long after the date of a transaction it can be disputed. Its therefore vital to start the process as soon as the issue is identified. A full, auditable record should be kept of any discrepancies, along with details of what steps were taken to address them and the eventual conclusion of the dispute. Maintaining an audit trail in this way is a vital element of the overall process.

What Are The Two Types Of Reconciliation

As mentioned above, credit card transactions impact both the expense side and the income side, which means we have two kinds of reconciliations.;

This is the expense side. Payments that your organization makes for goods or services with credit cards are reconciled using your monthly credit card statements. If your organization issues credit cards to executives, managers, or other team members, each one of those must be reconciled.;

This is the income side. When a customer pays you by credit card,; that payment is processed through your merchant account provider, which serves as an intermediary between the point-of-sale terminal or online gateway where the transaction occurs and your bank account. Reconciling these transactions is a bit trickier than reconciling the expense side, but with a few tweaks, its certainly doable.;

Related Content: What is Reconciliation in Accounting?

How Does Account Reconciliation Work

When you use accounting software to reconcile accounts, the software does most of the work for you, saving you a good deal of time. However, the process still needs human involvement to capture certain transactions that may have never entered the accounting system, such as cash stolen from a petty cash box. These five steps will help you make sure all of your money is accounted for.

Compare your internal account register to your bank statement. Go through and check off each payment and deposit on your register that matches the statement. Make a note of all transactions on your bank statement for which you don’t have any other evidence, such as a payment receipt or check stub.

Check that all outgoing funds have been reflected in both your internal records and your bank account. Whether it’s checks, ATM transactions, or other charges, subtract these items from the bank statement balance. Note charges on your bank statement that you haven’t captured in your internal records. Charges to watch for include uncleared checks, internally recorded auto-payments that haven’t cleared the bank account, check-printing fees, ATM service charges, and other bank charges such as insufficient funds , overdrafts, or over-limit fees.

Check for bank errors: Bank errors don’t occur very often, but if they do, the proper amount needs to be added or subtracted from your account balance, and you should contact the bank immediately to report the error.

The Importance Of Credit Card Reconciliation

Mistakes happen. Banks and credit card processors dont get it right 100% of the time. Apart from being useful in spotting innocent mistakes, reconciliation can also identify cases of fraud. Although the technology used by banks in detecting fraudulent activity has come on leaps and bounds in recent years, its still no substitute for human inquiry. Regardless of the sector the business operates in, auditors will always want to see confirmation of reconciliation to ensure the transactions on both sides match.

What Is Undoing Of Reconciliation In Quickbooks

Reporting Template: Credit Card Reconciliation Report ...

Reconciling bank statements is not that difficult, however, there is often the need to remove or un-reconcile a transaction or remove a particular transaction from the overall reconciliation.

This typically takes place when you by mistake add a transaction to reconciliation. Please find below some of the possible factors that lead to undoing Bank Reconciliation:

A transaction is not checked off properly and had not been cleared too
The bank statement date is wrong or not on the right day
The payment was registered for a wrong date
The bank reconciliation was done forcibly and now needs to be done in the right method

You May Like: Is It Best To Pay Off Credit Card In Full

Benefits Of Credit Card Account Reconciliation

Fraudulent credit card charges are very common and while the credit card company may notify you about fraud activity in your credit card account, you also have a responsibility to reconcile and check each transaction on your monthly credit card statement to make sure it is a transaction that you made or authorized. Also, the credit companies may a time limit in which you must report the fraudulent charges in order for them to remove them so reconciling your credit card account can help you spot transactions that you did not make or that are for the incorrect amount.; Also, if you spot a transaction that is fraudulent or not correct, you can file a chargeback with the credit card company to dispute the charge. Recording your credit card transactions in an Excel register or personal budget software and performing regular monthly credit card account reconciliations can help save you money.

In addition filing chargebacks for fraudulent card card transactions that you found while reconciling your credit card account or the bank alerted you to, the credit card company could have made an error such as a duplicate charge or incorrect charge for interest expense or a vendor could have intentionally or mistakenly overcharged you. Reporting errors to the credit card in a timely manner is important. Also credit card account reconciliation can help you have a better grip on your actual credit card balance owed and credit credit available credit.

S To Undo Bank Reconciliation In Quickbooks Online

QuickBooks Online does the reconciliation of transactions differently and hence you need to reconcile one at a time:

Step 1: Go to the Start menu and choose Registers from the particular Banking Menu and then select the Account from the particular Register Name in the drop-down.

Step 2: Now you need to tap on the transaction that you wish to reconcile and then delete R seen at the top of the transaction to edit its rank to the unreconciled.Step 3: In case you wish to reconcile every part of the transaction for a certain time-period, then it is recommended to print a list of the reconciled transactions by utilizing the reconcile alternative from the particular banking menu.

Read Also: How To Get Ethiopian Visa

Reconart Customer Success Stories

ReconArt is proud to receive the trust of our customers and we are dedicated to our mutual success. Here are some of the customers who leverage our reconciliation software to automate their reconciliation and close processes.

Calgary Co-op

Calgary Co-op is a member owned retailer operating food, pharmaceutical, petroleum, home health care, liquor, and cannabis outlets. Founded in 1956 in Calgary, Alberta, Canada.

How Can Crm Make This Easier

Quickbooks Desktop Tutorial for Beginners – How to Reconcile a Credit Card

Using Salesforce CRM with FinDock as an example, how does payment data in your CRM change the reconciliation picture? Well, we know that our customer paid their invoice with the credit card since that transaction was captured by FinDock and added to the CRM in real-time.

Any refunds or disputes would also be captured by FinDock since all events are sent from the PSP using webhook notifications.

As long as we make sure that Payment Provider is one of the reporting dimensions used when preparing this information for the AS, we can tell as part of the overall reporting that:

An invoice of 100 euros was paid using a credit card via processor X.
A dispute was processed for an invoice of 30 euros that was also paid using the same credit card via processor X.

This information can make the whole reconciliation process so much easier. Lets see what this would look like from the accounting side with this new information in place:

The CRM reports + 100 for X and 30 for X .
Lets book this against the subledger for Payment Gateway X, resulting in a debit position of 100 30 = 70 euros.

Recommended Reading: How To Sign Up For 3d Secure Visa

Benefits Of Account Reconciliation

Comparing transactions and balances is important because it helps to avoid overdrafts on cash accounts, catches fraudulent or overcharged credit card transactions, explains timing differences, and highlights other negative activity, such as theft or incorrectly recorded income and expense entries. This saves your company from paying;overdraft fees, keeps transactions error-free, and helps catch improper spending and issues such as embezzlement before they get out of control.

Reconciling accounts and comparing transactions also helps your accountant produce reliable, accurate, and high-quality financial statements. Because your company balance sheet reflects all money spentwhether cash, credit, or loansand all assets purchased with those funds, the accuracy of the balance sheet strongly depends on the accurate reconciliation of your company’s financial accounts.

Many industries have adopted GAAP, which stands for “Generally Accepted Accounting Principles.” It sets certain standards and practices in place, such as account reconciliation, that companies must follow to prove that their finances are sound.

What Is The Reconciliation Process

There is not a specific method that reconciliation needs to be done in, but in general, it involves comparing your internal accounts to your external accounts, such as reviewing payments and deposits, reviewing bank statements for all outflows and inflows of cash, noting charges that you have no receipts for, and ensuring that all debits match with credits and vice versa.

Read Also: Is Carecredit Visa Or Mastercard

The Process Is Time Consuming

The credit card reconciliation process can be tedious and time-consuming. This goes double if your company is still paper-based and doing things manually.;

Accumulating expense data, allocating all expenses to the correct party, and then verifying each expense is a massive task when done manually.;

Accounting teams typically dread this process because they know to expect full days of data entry and chasing paper trails.;

Collect And Sort Data And Documentation

How to Reconcile Business Credit Card Accounts in ...

Next, you need to collect necessary documentation such as receipts and credit card statements.

This can be a bit of a pain, chasing down employees and receipts. However, spend management solutions can help to eliminate this headache and make the process significantly more efficient.;

Youll also need to categorize all of the expenses and ensure that they comply with your companys travel and expense policy.

Evaluate Your Existing Reconciliation Processes

Balance sheet reconciliations serve as the foundation of your financial close; although a repetitive and often tedious portion of the close process, reconciliations also present a high potential for risk and bottlenecks. By evaluating your existing reconciliation workflow, e-commerce organizations can identify potential challenges and correct them before they become far-reaching consequences.

Because e-commerce businesses often have a high volume of transactions rolling in, reconciling transactions without a standardized and automated solution in place inevitably leads to higher instances of data entry risk, misstatements, regulatory and compliance risk, and more. In addition, the tedious nature of reconciling transactions can result in workflow inefficiencies, bottlenecks, and delayed deadlines if still depending on manual methods and spreadsheets.

When analyzing your reconciliation process, ask your F&A team where they struggle most. Is it the additional hours needed to stay on top of reconciliations every day? Are they missing time-sensitive deadlines? Is the lack of visibility translating into excessive emails and status meetings? Pinpointing current challenges not only prevents them from compounding but also enables financial transformation to turn those challenges into opportunities.

Account Reconciliation Explained In Less Than 4 Minutes

Account reconciliation is the process of comparing internal financial records against monthly statements from external sourcessuch as a bank, credit card company, or other financial institutionto make sure they match up. Knowing how to reconcile your accounts accurately is essential for the financial health of your business, as it helps to detect any errors, discrepancies, or fraud.

If you’re not using accounting software, your financial transactions will appear on your paper check register, credit card statements, and bank statements. If you’re using accounting software;to print batches of checks each time the company pays bills, your transactions will be recorded on your software’s account register.

Don’t Miss: How To Get Your Credit Card Interest Rate Reduced

What Is Credit Card Reconciliation And How To Do One

The world was already on the way to going cashless, and the COVID-19 pandemic accelerated that. When we were all in lockdown, just about the only way to pay for anything was by credit card or using an app on our phone. That means that businesses of all sizes are seeing a surge of transactions using credit cards, on both the income side and the expense side. Plastic makes it easier for our customers to pay us, and easier for us to pay our vendors and suppliers. But that ease of payment on the front end comes at a cost of complexity on the back end. Reconciling credit card transactions can be a lot harder than reconciling a bank account.

What Need To Consist Of In Credit Card Reconciliation Template In Excel

Credit Card Reconciliation Extension

Perfectly, its the very important areas you need to mention within your credit card reconciliation template in excel. And, in this article the parts are:

Header, it shows the depth specifics of your company or Corporation. It consists of corporations symbol, title, handle, and phone facts. Should you compose as own, you can provide your finish name, tackle and make contact with facts.

Date, Thirty day period and Calendar year

Recipients particulars

Opening salutation

Most important paragraph, frequently it is composed three-4 paragraph. The primary paragraph points out who you are and just what the uses of writing the letter are. The next and third a single tells another supporting Concepts why your issues are important being viewed as. And for The remainder, its the summary within your letter such as the hopes.

Closing Salutation

Your comprehensive title While using the positions at the company.

Whats the Format to get a credit card reconciliation template in excel?

A credit card reconciliation template in excel is a proper letter that has the plain rule for men and women in everywhere in the world. To make sure thats why, youll want to concentrate with its format and font. But all over again, Each individual Corporation could possibly have diverse structure and elegance for his or her Experienced communication. And were here to share the common types of the basic credit card reconciliation template in excel structure. Here some information over it:

Block Structure

Read Also: Is Paypal Credit Card Good

Why Do You Need To Undo Reconciliation In Quickbooks

Here are the possible reasons to undo reconciliation in QuickBooks:

All the transactions must be checked properly and should be checked that there is no check remaining which need to be cleared in the days to come
The bank statement given was wrong and not for the right date
The payment recorded was not for the right date
The conducted bank reconciliation was forced
Reconciliation helps users to point out the changes in income
Analyze numerous hidden bank errors
Reconciliation helps to avoid any kind of fraud from the employees or vendors

What Is Credit Card Reconcilation

These days, we use credit cards for just about everything. Cash may still be king in some quarters, but plastic is by far the more convenient choice. For businesses, the benefits of credit cards are two fold: they make it easier for customers to pay the business, and easier for the business to pay its suppliers. But for all its ease, the payment method comes with a complication: reconciliation. While reconciling bank accounts is a relatively easy process, reconciling credit cards can be challenging. As per soldo.com, credit card reconciliation is the process of verifying the validity and integrity of the data held on credit card statements and comparing it with a business internal records. Essentially, its how businesses make sure that the transactions on the general ledger and the transactions on the credit card are correct and valid. Its an essential administration task and a vital aspect of closing. Here, we take a look at everything you need to know about credit card reconciliation and assess how credit card reconciliation software can help ease the pressure of manual reconciliation by automating the process.

Don’t Miss: How To Lower Interest Rate On Credit Card Capital One

The Various Advantages Of Reconciling Your Credit Card Accounts Are:

It helps in recognizing the fake charges, illegal purchases, and wrong posting amounts.
It offers an opportunity to keep a record of the true liabilities of the business.
The purchases with missing receipts or online purchases can be recorded.
The interest charges and late fees can be managed and minimized.
It also helps in preparing a correct general ledger

Recommended Post:

The Types Of Credit Card Reconciliation

As floqast.com notes, there are actually two kinds of reconciliation, the first of which looks at the expense side of credit card transactions, and the second of which deals with the income side.

: The expense aspect of credit card reconciliation covers payments made by the business for goods or services along with credit cards issued to team members. Both will need to be reconciled using monthly credit card statements.
: The income aspect of reconciliation covers incoming payments from customers made through the businesss merchant account provider.

Don’t Miss: What Credit Card Companies Pull From Equifax

Notifying Your Bank In Case Of Error

There are always chances of error, either with or without intention. These errors can be corrected if you notify your bank at the earliest. Ensure timely action by reporting any unauthorized activities or fraudulent behavior.

Some examples of commonly occurring errors with card reconciliations are:

Refund for a canceled purchase
Charged for a failed transaction
Bill payment processed twice leading to duplicate charges

SUGGESTED READ: