Why is it important to reconcile cards?
Learn how card reconciliation can protect your business and control cash flow by checking the most important financial data.
There are some essential processes to maintain your company’s financial health. Credit card reconciliation, for example, is an essential part of your cash flow, as it allows you to check information about sales made using this payment method.
This way, you can track the origin of a payment until the money is available in your business account. This helps you identify possible errors, financial inconsistencies, and even fraud in the amounts received.
Understand better the concept of credit card reconciliation, its importance and how to do it!
What is card reconciliation?
Card reconciliation is an essential practice for corporate financial control . It involves checking the profits and receipts from credit and debit cards, as well as checking the fees charged for each transaction to ensure accurate cash flow.
It also involves checking the operators’ financial data, such as purchases made at your company, to ensure that the amounts paid, terms and discounts are correct.
Therefore, when performing reconciliation, you ensure that all sales and payments made with cards are properly recorded in the company’s cash register, in addition to checking whether the fees agreed with the operators are being discounted properly.
If any discrepancies are identified, it is important to contact the card operator to investigate the reason and request the necessary correction.
Importance of card reconciliation
Card reconciliation protects your company’s financial health and helps you manage cash flow more efficiently. By keeping this control up to date, you ensure accurate information and can better plan your receipts, especially from card sales. Find out why it’s important.
Error reduction
By checking your system records against information from card companies, you can identify possible errors or undue charges. This prevents financial losses and also helps you correct unexpected cancellations and duplicate sales.
This way, you gain time to resolve any issues and keep everything working properly.
Financial transparency
Card reconciliation is essential for you to have precise control over credit card sales. This allows you to identify possible errors in transfers from operators and ensure that everything is in order. With this practice, you maintain the transparency and security of your company’s transactions.
Identify amounts receivable with the discounted rate
When reconciling cards, you no longer need to worry about complicated calculations. This tool will help you track the different sales amounts to be received according to the rates for installment credit, debit, food card and other payment methods. This way, you will have more control and peace of mind when managing your company’s sales .
Cash flow control
With reconciliation up to date, you can closely monitor cash inflows and outflows, identify possible spending and receipt patterns.
This way, you will be able to plan your business finances more effectively and analyze the need to obtain business credit to help your business grow.
Identification of sales and card entries
When your business grows, it can be difficult to keep track of all the payments in your bank account. Sometimes it’s hard to know just by looking at your statement that day whether a credit card chargeback or transfer has happened.
With card reconciliation, all transactions are easily identified. This gives you clear and accurate information to make important financial decisions, allowing you to keep an eye on your company’s key sales indicators and continue to boost your revenue.
Fraud identification
You will be able to identify fraud and suspicious transactions, maintaining the security of your business. This way, you will be protecting your assets and avoiding financial problems.
What problems can be avoided with card reconciliation?
Card reconciliation prevents a series of problems that can affect the financial health of your business. For example, undue charges that may arise when card companies charge incorrect fees, duplicate fees or fees that differ from what was agreed upon in the contract.
Furthermore, sales cancellations can become a common problem for companies that do not perform daily reconciliation. This situation occurs when a customer makes a purchase but cancels it within the time period established by law.
Another important point is chargebacks, which occur when the cardholder disputes a purchase because they do not recognize the transaction. These situations are often linked to errors, bad faith or even fraud, as in the case of cloned cards.
Therefore, by carrying out card reconciliation regularly and efficiently, you protect yourself against these problems and maintain the security of your company’s financial operations.
Furthermore, if you still do everything manually, you run the risk of wasting time and making mistakes that will give you headaches, such as typing errors, lack of security in sales, and even financial losses.
How to reconcile credit cards
To efficiently reconcile cards in your business, you can simplify the process with a few important steps.
Record sales daily
Performing reconciliation every day is very important to avoid accumulating information. When you record sales, don’t forget to record the number of installments, the value and the date of sale.
Furthermore, keeping receipts of sales is essential! This way, if there is an error in the operator’s records, you will have the documents to show and correct the situation without difficulty.
Monitor the rates charged by operators
When checking the receipts from card sales, it is important to compare the data with the amounts you received after bank fees and charges. It is a good idea to look out for any incorrect charges and check whether the amounts are in accordance with what was agreed in the contract.
Typically, it takes about 30 days for card companies to transfer the money to your account and send you a statement. But sometimes, a sale isn’t recorded correctly by the card company, which can hurt your business.
Organize values by date
To make it easier to control, separate your credit card bills by date and classify them as cash, installment or voucher payments. This helps to keep your payments organized and avoid late payments. This way, you will have easier and more accurate control over your company’s finances.
Keep track of your bank statements
To ensure efficient control, check the bank’s issues at the end of the reconciliation. Check that the information on the operators’ payment statements matches the bank’s data. This helps ensure that the transactions were made correctly and that the fees were charged correctly.
Furthermore, bank reconciliation is very useful for controlling the money that comes in and goes out, especially with electronic payments, which makes it easier to plan better, know which payment methods customers use most and create strategies to attract more customers.
Separate the releases for each card
When business transactions and negotiations are frequent, it can be difficult to keep track of transactions without confusing card brands and companies. To make it easier to understand your daily cash flow, it is important to separate the payments and transfers corresponding to each card.
This way, the bank statement becomes less complex and easier to read, helping to maintain control of the business’s finances in a clearer and more organized way.
Redo the calculations when you find operating errors
It is important to keep an eye on and correct operational errors during sales reconciliation. This way, you can identify problems, such as repeated sales or cancellations that were not recorded correctly.
Even small mistakes can go unnoticed, but they have a big impact in the end. In addition to damaging your finances, an uncorrected error can cause problems, even with customers, resulting in adjustments or even lawsuits.
Use a credit reconciliation tool
Performing credit card reconciliation manually can be challenging. It often results in unproductive processes, decentralized and lost information, and ineffective planning.
If your company does not yet have a card reconciliation system, it is subject to errors and wasted time. To solve this issue, you can count on the help of a card reconciliation software, a software developed to perform these checks automatically, avoiding errors in transfers between the operator and your business.