The Struggles with Credit Card Recs Solved

These days it seems like we are receiving more and more requests to help with the automation and streamlining of credit card reconciliation. As a platform historically rooted in principles such as the ability to handle large data volumes, various and complex data sources, and multi-step matching scenarios, ReconArt™ is perfectly suited to answer this call.

E-commerce and Retail are among the first industries that come to mind when discussing this process – but nowadays, they are hardly the only ones that might be ‘drowning’ in credit card transactions coming in from various sources such as card-specific statements (VISA/MC, AMEX, etc.), online payment platforms (PayPal, ProPay, Cybersource, Amazon Payments, etc.), shopping cart solutions (Magento, Opencart, etc.), sales tax solutions (such as Avalara), and other consolidated merchant bank providers. The travel and hospitality industry with their bookings, non-profits with their donations, benefits administrators with their payment management, technology providers with their subscriptions – this is everywhere. And when we also count corporate credit card, or employee expenses, it’s hard to imagine any organization that can’t benefit from a solution engineered to handle the range and scale of these reconciliations comprehensively. Here are some of the most common challenges we hear about:

• Multiple data sources. Juggling different data formats, different cutoff times, and different pieces of information associated with card-based processes can be very challenging. Some organization still struggle by downloading various statements and reports and ‘massaging’ them in Excel for hours before even being able to compare them. ReconArt™ allows users to easily configure and automate their data source imports, so that their available data is already imported, normalized and matched by the time they start their day.
• Batched items. It can be nearly impossible to connect batched sums to detail level transactions. As many organizations can’t keep up with daily manual reconciliation, the process gets put off to month-end. By that time, there are hundreds of transactions to sift through, making the effort even more overwhelming. In ReconArt™, users can create automated match rules that can be as simple or as complex as needed, ensuring that they don’t waste precious time on ticking and tying matching items. Additionally, when the automation capabilities of ReconArt™ are leveraged, the organization can move toward daily or near continuous reconciliation of their card-based transactions.
• Timing issues & Exceptions. At any given point in time, it’s impossible to distinguish simple timing delays, which will naturally get resolved in a day or two, from real problems. There is never any real visibility into what is truly outstanding. The ReconArt solution allows for outstanding items to be categorized automatically, which empowers users to collaborate and investigate only the items that they need to spend time on – ultimately resolving them completely. ReconArt™’s ability to set the right focus for investigations and exceptions means priority and risk can be managed better and with more visibility.
• Growing volumes. With all the above at play, transaction growth can compound problems. Reluctant to add more headcount for manual reconciliation efforts, many organizations simply lose control over this process and become swallowed up in this necessary but tedious work.
• Multi-step processes. It’s rare that all you need to do is compare list A to list B – and that’s it. Reconcilers need to be able to interact comprehensively with their data: labeling and investigating exceptions, conducting research, generating reports, looking at trends, creating and approving journal entries, posting information in other systems of record. ReconArt™ accommodates all of the above in one fully auditable platform.

But let’s take a step back.

The classic example for this type of reconciliation involves a transactional comparison between credit card activity (in the form of bank activity and/or additional credit card statements) and what the company’s books show regarding credit card sales. Sounds pretty straight-forward on the surface. If you dissect the transactional flow of just a handful of organizations, however, you will find that there is actually a lot of variety (and potential complexity) in how organizations handle their credit card matching. This is due to the various business processes, workflows, systems of record, and data sources involved. Here are some common needs we come across:

• A simple comparison between credit card statements and the GL.
• Same as above, with an additional check against the bank .
• A simultaneous comparison between credit card activity and two internal systems, such as a GL and employee expense reports, for example.
• A 2-step comparison between an invoice system (that is separate to the GL/ERP) and the online payment platform (let’s say PayPal), with a subsequent comparison of the matched items coming out of that process to a sales tax software; followed by posting into the GL from ReconArt™.

So there actually isn’t one typical credit card reconciliation method – because all of the above scenarios reflect completely different business processes. This opens up some great conversations on our initial Discovery/Demo calls with prospective new users. Interestingly, more than any other transactional reconciliation process, credit cards often present transactional flow situations that on the surface can be perceived as a 3-way-match or multi-way match. This is because, at the end of the day, it seems like what we want is for all systems involved to reflect the same thing. Our tools are well suited to “many-legged” reconciliation and to giving insight into a transaction’s lifecycle.

The competitive advantages that the ReconArt™ solution offers are extremely applicable to credit card recs – proven ability to work with all the typical data sources, handling huge transaction volumes, providing integrated exception management, leveraging automation throughout, all while allowing for easy, intuitive administration and everyday business use. Without a doubt, credit card reconciliations have joined the ranks of some of the most interesting processes ReconArt™ deals with, and it is certainly one that is affecting a rapidly growing number of organizations. Having already leveraged best-practice reconciliation technology and strong automation; we welcome every opportunity to be the best long-term solution for this widespread business need.