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Problem reconciling credit card payments

Problem reconciling credit card payments

I am doing accounts for a Hotel. The amounts being credited to the bank do not reconcile to the daily total in the accounts for credit card takings. Is there a procedure that the hotel staff need to do for example daily total reconciliation on streamline.
Mark Gosling


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25th Jul 2008 09:40

Contact the credit card companies
I've had this nightmare and having operated a retail business for many years taking credit cards and cash I've instigated a foolproof methord of reconciling these on Sage (would work for other systems too).

Set up a bank account called "Till"
Post total takings to this till account (not worrying at this point how the sales were paid for). Account for VAT as the taking are entered here if appropiate.
On a daily basis (using the date of the till) make a transfer from the till account to the main bank account of the daily credit card takings being "banked". Split these betweeen Am Ex and other.
Also make a transfer for cash being banked.
Use this till account to record cash expenses from the till.
After all these are entered the balance on the till account should be the physical balance in the till.

Then you can reconcile the banking of credit cards in the bank account with the bank statements.

However important things:-
You need to agree witht he client a time when they are saying that it is the end of the day. Normally this is the time when the shop closes etc. This is the point that that the staff should run the credit card end of day reports so they can ascertain what the credit card takings since the last end of day report have been. Staff training is needed here to ensure that they always pull the end of day report and some form of cashing up sheet is needed in order to report these takings.

You then need to discuss with the credit card company when the "banking window" is. This is the time when the credit card company phone in and download the transactions taken since the last download. If this period is not the same as the period for the end of day reports then this is where you can have major problems reconciling the credit card takings. Transactions taken on one day on the till can be different to transactions downloaded.This is the most important thing to do - get the banking window to agree to the trading period of the shop.

Sometimes the credit card company or the bank show credit cards seperate from debit cards when the money is in the bank. I've found it easiest to have this amalgamated so that you end up with just one figure to reconcile.

Most credit card companies pay the funds to the customer about 3 working days after they have downloaded the transactions. So when reconciling thenbank you will always have some uncleared receipts. However American Express pay about 10 days later. The credit card companies bill the handling charges once a month (sometimes dated th last day of the month concerned or sometimes the 1st of the following - I ignore their date and post on the last day so there is no need to worry about accruals) but American Express dedcut there charges before transferring the money, so in order to reconcile these a bank payment needs to be made to include their charges. I always wait until the charges are on the bank statement before entering them.

Hope this is of some use!

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25th Jul 2008 12:34

Many Thanks
Thanks for the comments, they were most helpful especially Kevin.

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By Anonymous
24th Jul 2008 13:41

Money CAN go astray
Experience tells me that yes reconciliation IS difficult - it's NOT easy unless you use a balancing figure as an assumed cash in transit. Using a balancing figure as an assumed cash in transit is not recommended.

Taking the trouble to reconcile the takings to the bankings properly is necessary.

This was proven when a client of mine's cash account didn't balance - "where's the £600 gone".

The answer was an Amex credit card payment of £600 accepted that never hit the bank statement.

One clue, which you may or may not already be aware of, is that there's a date code on the bank statements alongside the amount received from credit cards. This can be very useful in reconciling figures.

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24th Jul 2008 10:48

It's just another bank!
Hi Mark

People get all uptight about credit cards but in reality credit card companies are just another bank.

If you open a new bank a/c in your accounting system for each Cr Card company and enter the daily transactions from your source documents they simply become 'unpresented lodgements' in banking parlance. These should then be cleared as they appear on the statement with any charges w/o as a balancing figure, just as one does with bank charges.

The same applies for cards used by employees, except that vouchers become as unpresented cheques.

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By Anonymous
23rd Jul 2008 18:01

Hi Mark,

We do many hotel and pub accounts and I agree that this can be daunting. You should first ask the staff to attach the credit/debit card receipt to the Invoice/Bar Bill tab and place them in date order. This in itself will help. Be aware that there is a time line before the funds are credited to the operating account and equally be aware that amex takes ages to hit. If you use Sage then it's easy to process all the credit card receipts to the bank control account "Credit Card Receipts" and when the funds hit, just do an inter acc tranny for the amount. Also beware of the amex charge fee. Another useful tool is the banks reconciliation statement which you should get monthly and will shown the breakdowns and dates of credit.
Hope that this helps

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By Anonymous
23rd Jul 2008 15:56

These can be a nightmare
The amount banked will not necessarily be a day's takings. Some days may be split over two bankings and unless you keep right on top of it, it can be a nightmare. There should be a schedule from the credit card company showing what has been banked each day, but all I can say is good luck!!

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