5 Steps for Improving Your Credit Card Reconciliation Process

How to create the credit card reconciliation process your company needs to stay competitive in today’s fast-paced economy

Seldom would a company consider an increase in sales to be a problem, but every sale translates into a transaction that needs to be properly reconciled. If the amount of transactions increases faster than your accounting team’s ability to handle them accurately, then your company could face a loss of consumer and investor confidence as well as financial exposure due to misstatements.

For too many companies, the amount of transactions has far surpassed what their current processing capacity can handle. The vast majority of these transactions are card-based transactions, as 75% of consumers prefer using some form of electronic payment card for their purchases. [1] Credit cards have revolutionized the speed and efficiency in which consumers can pay, leaving accounting teams struggling to manage the volume of transactions involved with this payment method.

If your company is looking to improve its credit card reconciliation process, these five steps will help you get started and ensure long term sustainability.

1. Become Self-Aware of Your Situation

Problems with credit card reconciliation can be as diverse as the companies that struggle with them, and each may experience a wide variety of issues within their credit card reconciliation process, including:

  • Difficulty meeting deadlines during period end
  • Issues identifying the source of the credit card transaction
  • Problems with credit card processors
  • Trouble with large volumes of transactions that are being handled manually
  • Delays in remediating issues when they arise

Without proper knowledge of what exactly needs to be fixed and how much impact it is having on your company, there’s no feasible way to make progress towards improving your processes. It’s best that you begin tackling this issue by taking a good look around and making sure that you have a clear understanding of what your challenges are before moving forward.

2. Move Away From the “This-is-How-We’ve-Always-Done-Things” Mindset

When most companies are asked why they handle their reconciliation process the way they do, the majority will answer with something along the lines of, “Well, we’ve always done it that way.” Well, so what?

These days, it’s hard to find a successful company that has ever used that philosophy. Having the mindset that since you’ve always done it one way you must continue doing it that way, stops you from ever innovating, improving outdated processes, and staying competitive in today’s global marketplace.

3. Trust Your Employees’ Ability to Adapt

You hired your employees for a reason. At some point, there was something about them that made you want to have them on your team – whether that be their problem-solving skills, work history, or their work ethic. You trusted them to be able to handle any task you set in front of them. Still, companies often remain focused on how everyone has always handled problems and ignore how things could or should be treated instead, fearing that disrupting any part of the process will throw the entire structure out of whack. Having a mindset like this tosses aside any opportunities for improvement. Being able to overcome challenges is great career development for your employees that will benefit them, and your company in several ways in the future.

You may want to come up with a plan that helps them see this, essentially explaining what’s really in it for them personally to help them readily adapt to any changes. In the end, your employees are noticing the same issues as you and are likely just as motivated to solve them. The key is to trust that they can quickly pick up intuitive systems designed to solve these issues.

4. Standardize and Centralize Your Credit Card Reconciliation Process

No matter what credit card reconciliation issues your company struggles with, the solution to the problem must have one characteristic: the ability to create standardization and centralization. Standardizing and centralizing your credit card reconciliation process ensures that bottlenecks and the risk of producing incorrect financial data within your workflow are removed; Ultimately guaranteeing that everyone is on the same page and you are able to reduce your risk of misstatement across your credit card reconciliation process.

5. Adapt Current Reconciliation Technology as You Have in the Past

Today, most companies handle their reconciliation process by manually combing through spreadsheet after spreadsheet. Despite how inefficient this process is, it seems to be an improvement because the spreadsheet’s predecessor, pen and paper ledger books, were even more inefficient. The digital age gave way to what was at the time, a faster and more efficient way of handling the reconciliation process with the introduction of spreadsheet-based computer programs.

Well, that happened in the 80s, and since then, the increase in credit card transactions have made the spreadsheet programs almost as obsolete as paper ledger books were back then. Current electronic payment trends have increased the number of transactions that companies’ accounting teams process, far past the point that manual spreadsheets were designed to handle. Just like companies once adopted current technology to improve upon their inefficient systems, companies once again, need to make that type of change to fix the problems they find themselves facing today.

Learn more on how you can automate your credit card reconciliations.


Written by: Caleb Walter