E-Commerce revenues are projected to grow to 4.88 trillion US dollars in 2021 worldwide. With such a rapid growth, eCommerce marketplaces are good channel of choice for sellers.Introduction of new technology and availability of multiple eCommerce software solutions in the market, it has become very easy for the sellers to onboard marketplaces and start selling.
In today’s competitive e-commerce market, it is essential to be quick, responsive, and accurate when a customer makes the transaction. But receiving and tracking online payments is a major challenge that many of the sellers still face today. Maintaining records regularly becomes almost impossible to manage with growing sales.
This is when, effective payment reconciliation system can help track your payments for the orders received. In this blog, we explain the characteristics of an effective payment reconciliation system with couple of case studies.
Case Study 1: Often, waiting period to receive supporting documents for missing transactions cause delay in reconciliation process.
Generally, we download statements from bank portal and upload them in client’s Accounting system (Quick Books). QB then auto matches the Deposits with AR invoices and Payments with AP Bills. Once it is completed, we check for unreconciled transactions. Most of them remain unreconciled because invoices are missing in QB & we had to wait until missing documents are received.
We overcame this challenge by suggesting Client to implement Bill tracking system for uploading Sale Invoices and Vendor Bills based on which AP Bills and AR Invoices get automatically created. Payments are then processed after 3-step approval process. Then, entries in Bill tracking system get synchronized with Accounting system. This process reduced the missing entry cases and improved the Bank Rec TAT.
Case Study 2: Bank Recs relating to past period which were already closed / completed are changed to unreconciled status without intimation. This used to result in re-doing the entire reconciliation from beginning to identify the difference.
As a general practice most of our clients like any other, close their books on periodical basis – Daily, Weekly, Monthly etc. based on the volume but this client of ours practices yearly-closure of books. Coming back to the issue, primarily, this used to happen due to lack of reporting. We suggested Client to list all such approved JEs / Bills which have been edited. To do this effectively, we have set cut off dates & maintained a log report to identify the items that were frequently being edited & investigated them to make sure they do not get repeated. Over a period, activity got streamlined and it became seamless.
