Payment reconciliation is important for companies that handle sales to the public, with steps varying depending on the type of company and payments due. Manual or electronic methods can be used, with credit card processing also a step for some businesses. The final steps involve human evaluation and action on the information provided.
A company that handles sales to the general public, especially those exclusively online, can benefit from payment reconciliation. The steps for payment reconciliation can vary depending on the type of company and the types of payments or balances due. A business seeking consumer payments may employ slightly different tactics than business-to-business payments. These steps can include matching invoice data to revenue to find discrepancies, contacting who owes payment, or even reconciling errors with financial institutions.
Many companies manually reconcile all payments from customers or other sources. This can sometimes result in missing payments or data, but it is still preferred by those who don’t want to invest in reconciliation software. The electronic payment reconciliation steps are designed so that the system can automatically gather and compare all relevant reports and send the results to the appropriate management unit.
Once the data is collected, the next payment reconciliation steps involve the software or computer staff sorting and assigning all the data. This can be done by product or line of business or by any other criteria determined by the business owners so that the relevant data is kept together. Then each piece or collection of data can be assigned to the relevant employee who handles that data. The next steps usually include transferring, either with the software or manually, all of this data into a spreadsheet or other such system, making it easier to review all deposits and collections.
Credit card processing can also be a step in the reconciliation process for some businesses. This includes transactions and the names, phone numbers and addresses of customers. It is important for most businesses to have third party software or hosting that can handle this to properly process payments and capture credit card information. The system can then decide for the company whether to cancel undelivered payments or resubmit them.
The last few steps will need some human interaction just to evaluate the information that the payment reconciliation program has produced. For the most part, the team is usually not required to research anything and should only act on the information provided. These actions may include contacting beneficiaries or archiving data for quarterly reviews. If payments cannot be reconciled, they are considered outstanding and, in most companies, become a high priority and can seriously affect business and customer relationships. It is important for companies to reconcile all possible payments, but most have a margin for unpaid debt built into their budgets.
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