Most people hardly remember a time before electronic payments. As the e-commerce industry continues to grow, so too does digital payments.
Whether your business operates online or not, EFT and debit card transactions make up the bulk of a business’s incoming and outgoing payments. This is why having an adequate reconciliation process in place is key to the accuracy of your revenue reporting to the IRS.
Payment reconciliation forms an important part of accounting. It is imperative that bank account balances are verified and accurately compared to a business’s reconciliation financial records. Inconsistencies will not only skew the outlook of your business finances, but it may also deter investors and create challenges when reporting your income to the IRS.
How reconciliation errors happen
There are many reasons why certain transactions may not reflect on both the bank statements and your company’s books. This could range from the fact that some e-commerce platforms make use of reserved balances, which means that they hold a percentage of an e-commerce business’s sales revenue as insurance against damages or refunds. In this instance they would release an amount into your bank account that is different to the recorded sale in your books. Once the transaction is finalized, they will settle the balance owed to you. A disparity in the recon could also be as a result of an oversight of your bookkeeper or because your accounting software lacks sufficient application integrations.
Netsuite’s reconciliation ability
Netsuite automates the payment reconciliation process. The accounting software automatically imports bank and credit card data into the software and has the ability to to compare and reconcile matching entries, while it points out the discrepancies that need investigation. The software also makes it easy for you to drill down into specific transactions to monitor and make sense of differing records with ease. The best part about this is that with Netsuite your business has the ability to keep regular tabs on discrepancies and resolve it before it creates a bigger mess in your accounting. Not only does this make for greater accuracy, it also minimizes the administrative burden for accounting teams that need to trace hundreds of discrepancies manually.
Automated payment reconciliation enables businesses to get a handle on their finances to ensure that their records are accurate and up to date when having to submit their tax returns and for attracting potential investors.
NetSuite is a powerful tool for accounting within enterprise businesses. At this level, your business cannot afford massive accounting messes – it could cost you gravely. Working alongside a qualified professional to implement a highly capable software, with automations bespoke to your business needs, can help you keep your accounting records clean. If you are interested in getting an efficient accounting management system and accurate business data, our experienced team of accounting professionals can help your business set up and integrate NetSuite software to function effectively.
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This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.
