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Automation is the key to these procedures, which are essential for making decisions based on reliable data.

Table of contents:

• What is credit card reconciliation?
• The benefits of automating reconciliation
• Credit card reconciliation: the problem of multiple formats
• How to reconcile credit cards?

Reconciliation is a fundamental process in companies and organizations of various sizes, industries and sectors. We have already highlighted its relevance in verifying the reliability of accounting results, and this time we will focus on credit cards.

What are the benefits of automating the processes? In addition, we will address the issue of multiple formats and offer you a solution to this dilemma.

What is credit card reconciliation?

The reconciliation of credit cards is a procedure for controlling the transactions carried out with these instruments.

In other words and in general terms, the reconciliation is used to check that the accounting information is accurate, based on the consistency between payments, collections and account balances.

As with bank reconciliations, purchases made with credit cards must conform to the company’s accounting, with a reflection in the accounting entries, even knowing that the payment is made in different installments.

Keep in mind that although the due date for payments implies not making a disbursement at the time of the transaction, it is important to reflect this movement for the reconciliation exercise.

The benefits of automating reconciliation

By employing software that automates this exercise, companies benefit in a number of ways that result in agility, efficiency and savings of vital resources.

In the different types of reconciliation (including credit card reconciliation), automation offers the following advantages.

• The exercise can be cumbersome when data volumes are very large. Automation solves this problem, simplifying and streamlining the processes.
• This methodology also avoids the errors that usually occur in the manual task, which is entirely performed by human agents.
• By automating, reconciliations are performed more frequently, and it has been proven that increasing the frequency of reconciliations is a vector that favors companies by providing a true picture of their finances on a regular basis.
• Automated processes facilitate the detection of inconsistencies in data and the subsequent addressing of solutions.
• This methodology brings full transparency to the data; it sheds light on it.
• With accurate and reliable information, companies make better decisions.
• Automation frees the members of organizations from repetitive and mechanical tasks, providing them with resources (especially time) to focus on business-relevant practices.
• In this sense, by focusing resources efficiently, automation usually translates into good news for the company’s revenues, increasing productivity levels.

In short, through the automation of reconciliations, companies take real advantage of the innovative solutions provided by new technologies, resulting in more productivity and the possibility of focusing activities on key aspects of business, avoiding the errors usually incurred in manual exercises.

To automate is to truly “juice” the data.

Credit card reconciliation: the problem of multiple formats

Many companies encounter the following inconvenience when reconciling credit cards: when operating with different banking entities, the process becomes more complex.

As we noted in The Importance and Benefits of Effective Bank Reconciliation published in this blog, it is imperative to keep in mind that companies are complex in managing their costs and payment methods.

The “key that opens doors” is the use of a reconciliation system that has the following characteristics:

Automated, based on the above-mentioned benefits.

And that it be unique (centralized), to process all operations beyond the multiplicity of formats.

The key is to extract your credit card information from any file format, database or API, through automated reconciliation systems with user-friendly and flexible interfaces.

How to reconcile credit cards?

To reconcile credit cards, when making a purchase transaction, without delay that amount should be reflected as an expense, on the same day the transaction took place. This is fully advisable, even when the payment is made at a later date, considering the mechanics of these instruments.

As we have already said: the payment is a posteriori, but the obligation has already been taken.

While it is important for treasury and cash flow to know that when paying by credit card, the amount does not have to be disbursed at the time of the transaction, it is key for accounting management that there is a correlate of the payment obligation.

While some organizations approach reconciliation manually by extracting the statements for each transaction and dumping them into spreadsheets (Excel) and then comparing the data, automation simplifies the task, as we indicated earlier in this article.

At Conciliac we offer automated tools for reconciliations, useful to avoid errors and speed up the process, also for credit card control. What happens if the system finds inconsistencies? They are reported in a few minutes, so that human agents perform the checks and a real synergy is achieved.

At the end of the day, it is important to rely on data to make the best decisions.