Payment reconciliation is important for businesses, especially those with online sales. The process involves matching invoice data with receipts, allocating data, and reviewing deposits and debits. Credit card processing and human interaction are also involved. Unreconciled payments can affect business and customer relationships.
A business that engages in public sales, especially those that are exclusively online, can benefit from payment reconciliation. The steps for reconciling payments can vary based on your business type and the types of payments or balances you owe. A company seeking consumer payments may use slightly different tactics than business-to-business payments. These steps may include matching invoice data with receipts to find discrepancies, contacting payees, or even reconciling errors with financial institutions.
Many businesses manually reconcile all payments from customers or other sources. This can sometimes result in lost payments or data, but 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 collect and compare all relevant reports and send the results to the appropriate handling unit.
Once the data is collected, the next steps in reconciling payments involve computer software or personnel sorting and allocating all the data. This can be done by product or line of business or any other criteria determined by the owners of the business, so that the relevant data is kept together. Then, each piece or collection of data can be assigned to the relevant employee who deals with that data. The next steps generally include transferring all of this data, either with software or manually, to a spreadsheet or other similar system, so that it is easy to review all deposits and debits.
Credit card processing may also be a step in some businesses’ payment reconciliation process. This includes transactions and customer names, telephone numbers and addresses. For most businesses it is important to have third party hosting or software that can handle this in order to properly process payments and capture credit card information. The system can then decide for the business whether it should cancel unreceived payments or resubmit them.
The last few steps will require some human interaction purely to evaluate the information produced by the payment reconciliation program. Very often, staff are generally not required to research anything and only need to 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 pending and, in most companies, become priority and can seriously affect business and customer relationships. It’s important for businesses to reconcile as many payments as possible, but most have a margin for unpaid debt built into their budgets.
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