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Why Does Your Business Need Professional Credit Card Reconciliation Services?
Plastic money or credit cards are today calling the shots over the more sedate and traditional business payment options of yesteryears like paper currency and checks. This has given rise to a new breed of accounting procedures where amounts received against sales are reconciled with bank accounts after a time gap, usually about a month. This can lead to many inconsistencies as a number of different heads of accounts have to be brought together at one place and balanced.
These include a statement from banks that handles your credit card sales, reports from sales departments giving the quantum of sales made against credit cards, and fees and commission charged that has to be accounted for in the company’s profit and loss. All this is easier said than done because it is a long drawn and tedious process. The number of card transactions can be in thousands even for a medium sized company and will require the collective effort of huge manpower resources to keep everything in order and under control.
The scenario is more complex for the service sector where billing is done as per usage. Here there is no definite sale and drawing of bills is a continuous process not based on the sale of any unit of something. Thus, it will not be possible to physically identify anything that has been purchased through credit cards, making things more difficult for company accountants.
Check This Infographic – Importance of Account Reconciliation for Businesses OR Individuals
What then are the options before you to ward off all these complexities? The straight route is to outsource credit card reconciliation to agencies that have the professional expertise to accurately balance relevant books every month. This will help you in a number of ways. First, you do not have to invest heavily in state of the art hardware and software as well as qualified manpower to take care of the credit card reconciliation process.
These savings can be fruitfully used for business diversification and competitive product pricing so that you can ensure higher business growth and development. And next, you do not have to worry about keeping your books in order and can instead focus on the core competencies of your business.
The question then is why does your business need professional credit card reconciliation services to optimize business operations?
Accurate matching of internal and external transactions
The process is initiated when credit card statements are received from the concerned banks detailing out debits, credits and charges. It is usually on a monthly basis. The outsourced agencies will set off the items against your internal records such as receipts against sales and debits against payments made. If any discrepancies are found, it will be submitted to you in the form of a report and corrective action can be taken.
Advice on remedial measures
When you outsource credit card reconciliation, the agency will help you in solving any items that are not reconciled. This is helpful in two ways. First, it reduces the pressure on you as you don’t have to go through a mountain of invoices and vouchers to get to the root of the problem. Everything is taken care of. Second, since external agencies are balancing the heads of accounts, you can be sure that there will be no fraudulent transactions that can possibly go through undetected. Hence, once credit card reconciliation is over, you can be sure that your accounts are accurate and precise in all respects.
Speed of processing
Outsourcing agencies complete the reconciliation process quickly and effectively. Any disputes with the credit card processor will be addressed speedily and journal entries made. Where errors have been traced, rectification too will be done immediately to iron them out. This is especially applicable in cases of chargeback. Most credit card service providers have definite time frames for sorting out any differences and do not entertain any representations for redress after a stipulated date from that of the transactions. By finishing the reconciliation process at the earliest, this possibility is totally negated.
Use of advanced software
Accounting Services provider use the latest and advanced systems and Credit card reconciliation software that almost automates the whole process. Data, both from ERP and general ledger on one hand and credit card statements and files on the other are imported and directly matched against each other. Any differences are immediately inspected by highly experienced and qualified accountants and measures taken for rectification. This includes taking care of chargeback issues from merchant service providers.
It is therefore seen that by taking the decision to outsource credit card reconciliation, you are in fact ensuring the accuracy and precision of a large number of accounting heads simultaneously. Hence, when the reconciliation process is over, the final balance sheet can be safely placed before stakeholders and lenders for increased credit limits or paying dividends.
One of the leading agencies in the field of credit card reconciliation is Cogneesol. We have long years of experience in this field and help our clients balance their books of accounts quickly and speedily. To know more, write to us at email@example.com
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