Reconcile Payments and
Returns Across Channels

The payment Reconciliation process has two variable methods; Internal & External. The internal method involves bookkeeping programming within the organization records when a transaction or payment has been made. Bills of payments are kept track of and inbound and outbound transactions are cross-checked. The external method refers to the process where transactions are processed and recorded automatically. Every transaction is listed and the company keeps track of every transaction from billing to Vendors to payment methods, etc. The company’s internal and external transactions are verified and matched to reconcile the statements. Errors are determined by the company and decided if it’s due to an internal or external payment gateway and are accordingly reconciled from the merchant server.

1. Commission: If the seller is selling through Amazon, then Amazon will cut a commission for itself for marketing and selling the seller’s product.
2. Payment/Closing fee: The marketplace may also have additional charges like ‘closing fee’ on each product.
3. Shipping charges: Nowadays most marketplaces provide shipping services to their sellers and deduct the shipping charges from the payment due to the seller for the sale. Often sellers experience that inadvertent errors in the recording of the product leads to the marketplace overcharging for shipping.
4. Storage/Warehousing fee: If the seller chooses to avail the storage services of the marketplace, then an extra fee of ‘storage or warehousing fee’ may be applicable.
5. Discounts: Discounts can either be offered by the seller directly, or by the marketplace. The marketplace is entitled to deduct the discount before making the payment to the seller. In turn, the seller must be careful to see that the marketplace does not deduct from what’s due to him, value of the discounts offered by the marketplace.
6. Statutory Taxes: All applicable statutory taxes, including service tax applicable on shipping services etc., will also be deducted by the marketplace before remitting the payment to the seller.

Reconciliation refers to the process of ensuring and confirming that internal financial accounts are consistent and accurate against the monthly statements from external sources of payment.

1. Bank reconciliation
2. Vendor reconciliation
3. Customer reconciliation

The account reconciliation process follows straightforward steps, whether or not it’s performed manually or automatically. Here’s how it works.

Compare: The process begins by comparing all transactions noted in your internal ledger against your bank statement. 

Identify: Identify all payments that are recorded in the internal cash register, but are not reflected in the bank statement. These payments should be deducted from the bank statement because they are cash payments. For checks deposited into the bank, there may be a delay for when they are reflected. As such, you want to be sure to identify these types of transactions because they could be cause for the discrepancy.

Confirm: Once you’ve identified these types of transactions, they must be recorded. If you have receipts from the cash register that are not reflected in the bank statement, add them, and vice versa. 

Find errors: It’s unlikely, but possible, that the bank has made a mistake. This could be in the form of duplicate records, incorrect records of transactions, commissions, etc. To reconcile the bank statement to be correct, you must modify these errors by notifying the bank. 

Balance records: Once you’ve found discrepancies or resolved errors, ensure that the records are balanced and accurate. 

Account reconciliation software performs all these steps automatically by pulling data from every source of financial information, including bank statements, merchant services, credit card processors, and ERP systems.

Automation helps finance reconciliation by providing a multitude of benefits, including: 

• Reduces manual error: Any process that requires data and manual entry is prone to error. But, if you utilise an automation tool, you reduce the opportunity of inputting incorrect information because the software pulls data directly from the various sources. 
• Maximises time and productivity: Reconciliation can be performed in a matter of minutes. Whether its document review or analytics review, you will be alerted to any anomalies or discrepancies as they are found. This way, your team can focus on the work they need to get done as the tool does the detail-oriented tasks. 
• Centralised data: All data can be securely stored in one centralised place. Say goodbye to financial documents across desktops and spreadsheets and notes all over the place. 
• Access controls: Grant access to the people within your organisation that need to review or approve transactions and accounts. 
• Auditing and compliance: Rest assured, knowing that all data that moves within the system is stored and recorded for audit trails. You can reduce compliance risk as the exact process remains documented within the system and is standardised.

A payment reconciliation system detects leakages in financial transactions of orders inventory and returns. It can find commission overcharges, Shipping overcharges, Pick-pack overcharges, Inventory missing without reimbursement, Carrier damaged without reimbursement and order replacements without reimbursements.

System reconciliation refers to a software which reconciles payments automatically and detects transactions which have leakages and cannot be reconciled. It often provides a report for order against which incomplete or no payment has been received. The system compares the accounts statement history with the information received front the bank and helps reconcile payments. Reconciliation reports can be reviewed to identify outstanding payments and discrepancies between net pay amounts and bank reports.