How to Speed Up Credit Card Payment Reconciliation Right Now

How to Speed Up Credit Card Payment Reconciliation

Are you still reconciling your credit card payments manually? Payment reconciliation is a necessary task for any business, but it can be extremely time-consuming. Your finance team needs to match your company’s bank statements with your company’s books to ensure that everything is in perfect order.

However, reconciling credit card payments takes up countless hours each and every month. Especially if you rely on manually matching your numbers, the process can become incredibly laborious.

As a result, finance teams waste precious time every month that could be redirected to much more productive purposes. So, we’ve compiled a number of ways that you can speed up your reconciliation process to save both time and effort.

What is Credit Card Reconciliation?

Credit card reconciliation is the process of verifying that all credit card transactions — both expenses and income — match what appears in your company’s general ledger.

Credit card statements show the costs incurred by employees, including operational costs, travel spend, and any other corporate expenses. Merchant services, meanwhile, refer to the costs paid to your company by customers via credit card.

Both types of these transactions need to be reconciled and accounted for.

Why Is the Corporate Credit Card Reconciliation Process Important?

As tedious as the corporate credit card reconciliation process can be, there are a number of reasons it remains a crucial part of corporate accounting.

For starters, it can highlight errors or discrepancies in your records. Unless these mistakes are found and acknowledged by a person or a program, they would otherwise go undetected and uncorrected.

Reconciliation also makes it easier to detect instances of fraud. As soon as an inconsistency is detected, it can be investigated and resolved.

Finally, reconciliation is an important step in verifying the integrity and accuracy of your financial statements. It allows your finance team to feel confident in your company’s records, especially in the event that they are requested for an audit.

Tips for How to Reconcile Corporate Credit Card Expenses

Implement an Expense Policy 

Ensure that there is an updated expense policy in place and that all employees are aware of it and periodically re-trained on it. This should lay out all rules and procedures associated with making work-related purchases — from who needs to give approval before purchases can be made, to budgeting guidelines for specific purchases (i.e. best practice for selecting reasonably priced flights or hotels), to the process for documenting all transactions.

Categorize Expenses As You Go

Employees will save everyone a lot of time if their expenses are categorized as purchases are made. Virtual credit cards and spend management software make this incredibly easy to do by assigning specific cards to specific vendors or categories and then automatically matching receipts and documenting transactions within the software. 

Eliminate Shared Cards

Sharing corporate credit cards is inconvenient for everyone, and leads to frequent errors and confusion. In addition to the inconvenience of having to physically find the person with the card and borrow it to use it (which also increases the chance that it gets lost), shared cards make accountability difficult if multiple people have access to the same card. 

Challenges with the Corporate Credit Card Reconciliation Process for Finance Teams

Manual Matching

Traditional reconciliation involves a member of the finance department going through every line of a credit card statement and matching the corresponding receipts to each purchase. This is time-consuming work, and often takes up time that accountants could be spending on more important tasks like strategic planning.

Risk of Human Error

Another common challenge to credit card reconciliation is the risk of human error associated with manual processes. Even with double and triple checks, if something gets missed or a typo is made in one cell somewhere in a massive spreadsheets, your company’s books could be completely thrown off. 

Tedious Policy Checks

In addition to matching receipts to credit card transactions, the accounting department also has to verify that the purchases made are approved and follow the rules of the company’s expense policy. Having to look up specific rules and send out emails or phone calls to ensure that purchases were approved is a huge suck on the time and effort of your finance team.

How to Make Reconciliation Fast and Accurate: Virtual Cards

Physical cards are not suitable for modern businesses that need to stay agile to respond to market changes. Entrepreneurs need a smart way to pay for business expenses that eliminates the need for manual work.

Nowadays, businesses can pay for various expenses using a virtual card. These act just like a physical credit card, but come with several perks to facilitate and improve payment reconciliation.

Complete Payment History

You can typically issue as many cards as you want for individual employees, ensuring that someone is accountable for each transaction.

Also, virtual cards don’t need you to enter data manually in your books. You get the complete history of the transaction as soon as it happens. Moreover, you can pull out details like who made the purchase, who approved it, when and where it was made, and more.

As a result, you save hours by eliminating manual data entry. You also get all information you need about your payment in real-time, right in your interface.

Customizable Control

Virtual cards give you the ability to control your business spending. You can create cards with customized payment limits and budgets. In addition, you can set up card behaviors, like one-time use or multiple-use.

Plus, you can also set expiration dates as you seem fit, and even lock cards to particular vendors so they are only ever used to pay for specific SaaS subscriptions or office supply orders.

Virtual cards also improve transparency. You can easily spot any suspicious expenses and cancel a card anytime you want.

Complete Visibility

You gain complete visibility into your spending once you start using virtual cards. Each payment shows up instantly, and you can even automate receipt matching. Your employees can use a dedicated email address to send invoices that your system automatically matches with transactions.

As a result, you don’t need to chase after your employees to send receipts. The task is achieved by sending auto-reminders via the dashboard.

Quick Reconciliation

Virtual cards can speed up your payment reconciliation exponen