All online businesses use payment gateways to collect payments from their customers. This is the easiest way of collecting payments from customers as payment gateways are integrated with all the banks which helps them transfer money from customers bank accounts to merchants bank accounts after deducting their charges and applicable taxes.
A business might start with one payment gateway but over time to add resilience and get better rates, businesses add multiple payment gateways on their websites and apps. This ensures that even if one payment gateway’s service is not available, the business does not suffer as they can move traffic to other payment gateways.
But during this whole process of collecting payments from customers, reconciliation between a challenging activity wherein Finance team has to verify whether the sale recorded has resulted in a settlement or not.
Challenges in payment gateway reconciliation process:
- Multiple payment gateway integration
- Different settlement report formats for each PG
- Manual data download via payment gateway portals, dashboards
- Extract Order IDs from PG reports
- Clean, standardize data before reconciling them
- Apply complicated formulas for reconciliation
- Result spread across multiple Excel files
- Difficulty in sharing results, analyzing it with colleagues
- Repeat the manual process daily or due to lack of bandwidth push the reconciliation activity to once a week or once a month
To overcome these challenges, we have built a system which can easily reconcile any payment gateway settlement report with internally recorded sales data and bank statement.
Setup of Payment Gateway Reconciliation process in Cointab’s automated reconciliation system:
- Configure internal report format (our software adapts to a business’s data format without making any change in the existing format or process)
- Configure payment gateway reports as used by business. Configure their charge structure
- Automate data load of internal report and payment gateways via APIs, SFTPs, Email attachments, etc.
- Configure bank statement for credit verification
Once the setup is done, the entire payment gateway reconciliation process is fully automated:
- Data is automatically loaded in the reconciliation system on a daily basis
- Reconciliation is automatically triggered
- Post reconciliation, email is sent to concerned team with reconciliation summary of reconciled and unreconciled items
- Team can view the result on our Dashboard, analyze it, work on unreconciled items if any, share data with colleagues, partners
The reconciliation result consists of the following:
- Reconciled Transactions
- For successful sale, payment should be received from payment gateway
- For refund sale, payment should be received first and then it should be refunded
- For cancelled sale, neither payment should be received nor refund should be processed
- Consolidated credit as due from payment gateway is received in bank account
- Unreconciled Transactions
- Sale recorded in internal data is missing from payment gateway settlement report
- Payment gateway have given credit for a transaction which is missing in internal report
- Payment gateway have captured less amount for a transaction compared to internal report
- Payment gateway have captured more amount for a transaction compared to internal report
- A refund recorded internally is yet to be processed via payment gateway
- Refund processed is of incorrect amount or is processed more than once
- Payment gateway have overcharged for a transaction compared to what they should as per business contract
- Settlement reported by payment gateway is not present in bank account statement
- Settlement is present in bank account statement but is of incorrect value, either less or more
As the manual work of data download, load, cleaning and applying reconciliation rules is done by the system, the Finance team can directly start analyzing the result and work towards closing unreconciled items if any, thereby saving a huge amount of time on a daily basis and increasing efficiency manifold.
