Understanding payment reconciliations: step-by-step guide & best practices
September 21, 2023
5 min
Imagine a world where your bank account balance never matched your receipts, merchants couldn't track their earnings accurately, and hours were spent each day reconciling thousands or hundreds of thousands of transactions. This is the chaos payment reconciliations save us from.
Gone are the days of manual reconciliations in Excel that consumed days and caused countless headaches. Today, reconciliation is an automated process that resolves numerous business challenges and opens up new growth opportunities.
In this article, we delve into the transformative power of reconciliations using our product as an example. Discover how Corefy’s reconciliation centre can alleviate your business pain points, simplify operations, and pave the way to ongoing financial health.
Understanding reconciliations
First, let’s define the reconciliation process:
Payment reconciliation is a method of bookkeeping that compares your financial records with bank or payment provider statements to ensure the accounting is accurate.
By comparing and validating transaction data, you can identify discrepancies, errors, and anomalies in your financial statements. This process allows businesses of any industry and size to maintain the integrity of their financial data and provides a solid foundation for decision-making.
With the seeming simplicity of reconciliations, they can pose some challenges for business owners. The more PSPs you partner with, the more ledgers and ledger formats (that tend to change often) you have to deal with. Add a growing number of currencies and methods, and that’s what reconciliation hell looks like.
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Reconciliations at Corefy: how does it work?
Corefy's Reconciliations are designed to simplify and automate matching transactional data, significantly reducing manual efforts and human errors. The procedure resembles a comparison of two datasheets: one from our platform and the other from a payment service provider. Our system matches the data sets to help you ensure all data coincide or spot discrepancies.
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Reconciling step-by-step
Our reconciliation centre offers a user-friendly interface, making the process intuitive and accessible even for those new to the task. The whole process involves three main steps:
- Open the Dashboard and upload the file in CSV, XLS, or XLSX format. Then select the import scheme specific to the provider you wish to reconcile (e.g. Stripe report scheme).
A scheme is a pre-configured framework, or set of settings customised for each type of ledger (as there could be several ledgers for a single payment provider) individually.
- Our reconciliation system will automatically analyse your file transaction-by-transaction, detecting mismatches, errors, and collisions between transaction data from the provider and Corefy (payment gateway).
- After completing the import and comparison, you will have access to a comprehensive list of all transactions along with their corresponding status, whether they are matched or in conflict. With detailed info on each transaction, you can quickly pinpoint any discrepancies that may have occurred.
The frequency of reconciling depends on your business size, turnover volumes, and the reliability of your payment providers. The more transactions occur daily and conflicts are identified, the more often you should reconcile the balances.
Who can benefit from Reconciliations?
Numerous industries can reap the advantages of implementing a reconciliation system. E-commerce businesses, forex companies, gambling platforms and operators are just a few examples. If you work with more than one PSP or have multiple merchant accounts, reconciling balances directly affects your company’s financial health because you can:
- Find out if any transactions were missing or duplicated
- Check if any suspicious transactions need further investigation
- See if your new provider is reliable and if the new integration went right
Regardless of your business's size or the scale of your transaction volume, streamlining the labour-intensive task of reconciling transactions eliminates the hassle and allows you to focus on your core business activities.
Must-have features and best practices
Why tackle reconciliations with Corefy? Well, we have something to offer you. For those who need to reconcile much and often, we developed a fully-equipped solution to automatically tackle reconciliations across multiple PSPs, merchant accounts, and payment methods.
Here’s what our Reconciliations can do for you:
- Aggregated real-time data. We consolidate and normalise data from multiple internal and external sources in one place, making financial statements coherent and consistent. You always have the latest data available.
- Collisions management. Our system detects and promptly notifies you about missing records, duplicate entries, data entry errors, or other mismatches. You can use manual corrections to handle collisions and exceptions and update the transaction status when needed.
- Proofs in investigation. Corefy securely stores every transaction statement for your further reference. Access statement history and logs whenever you need to solve possible issues with payment providers.
- 2-directional reconciliation. You can check not only that all transactions recorded by the payment provider are correctly accounted in the payment gateway database (Corefy) but also check if payment providers have all the transactions recorded by a payment gateway and whether the data coincide.
Interested in achieving integrity and relevance in your financial accounting? Corefy`s Reconciliations solution will be your great assistant. Don’t hesitate to contact our team and get started right now.
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