Practical eCommerce

mortonsfoot · **Date:** Mon Mar 19, 2007 6:02 pm **Subject:** Reconciling e-commerce revenues

Reconciling the bank statement is always a mess when it comes to credit card revenues. This must be an issue that applies to brick and mortar and e-commerce. I am sure someone knows exactly how to do it, simply and quickly. Nordstroms has to do this for hundreds of thousands of transactions every day, but I haven’t yet found anyone who can give a nice scalable procedure yet, so I ask you. All of your credit card transactions are processed and settled at the end of the day on one nice batch by the credit card portal. Then the merchant account issuer, it seems a day later or so, funds the transactions and makes a deposit into your bank account. But since American Express and Discover funds their transactions independently, the merchant account batch is different than the original credit card portal batch. Then Discover funds their part, and American Express funds their portion whenever they get around to it. The net result is dates and amounts are now a big scramble. What is an easy way to reconcile it all to make sure deposits actually equals orders shipped? Or is this the equation Bank Deposits = Revenue.

bgetting · **Date:** Mon Mar 19, 2007 7:19 pm **Subject:** Financial Software

These challenges should be addressed in some form by the financial or bookkeeping software that you use. Depending on the accounting method that you use, it can be one of the following:

purchase = revenue

receipt of funds = revenue

Of course, nothing should ship until payment has been verified and deposited.

mortonsfoot · **Date:** Tue Mar 20, 2007 8:13 am **Subject:** Financial software

Begetting: Thanks for your reply.

It makes me uneasy to just accept the bank deposits as my revenue because there is no reconciliation between the shopping cart revenues and the bank deposits unless that is performed separately, outside the accounting system. Seems if something went wrong in the payment processing chain it would not easily be discovered. But there is a second issue. The bank batches have no detail, on s&h charges and sales tax payable. That information needs to get into the accounting system some way.

I use QuickBooks. In the past I have imported each transaction from the credit card portal as deposits to accounts payable. At the end of the month I would download the transactions from the shopping cart and create one single invoice with three lines items only (goods sold, s&h charges and sales tax charges) against which all the accounts payable deposits were cleared. This has worked fine, but as our transaction volume is increasing, it has become a real pain to 1] clear all the payments against the single invoice, and 2] reconciling the bank statement forces me to recreate the each bank deposit batch to check off the individual payments received. (The bank statement deposits are the daily batches from the merchant account, AX and Discover, while the QuickBooks deposits are the individual transactions every day.)

This is a solid reconciliation with excellent controls, but it is way too time consuming.

fred333 · **Date:** Wed Jan 30, 2008 9:51 am **Subject:**

Thanks for the recommendation.

nMoncrief · **Date:** Fri May 09, 2008 4:37 am **Subject:**

I had the same issue with balancing the statement when I owned 2BigFeet.com. I didn't use QuickBooks, so my solution may not work for you. I found it was very easy to reconcile the statements as long as I recorded deposits seperately. I would record my daily total for V/MC as one deposit, my AmEx total as another deposit, and the Discover total as a third deposit. Then, it didn't matter how long those deposits took to reach the bank. Hopefully, this will help you!

The absolute worst problem occurs when a credit card processor withholds their fees daily instead of monthly. That makes a $100 deposit show up on your bank statement as $98 and change. You'll NEVER balance that statement! If any reader is stuck with that deal, call me for a quote. Your accountant will thank you.

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