Day: February 3, 2020

Recording & Reconciling 3rd Party Merchant Payments

Discrepancies occur often with bookkeeping and one of the most popular I have seen is during the reconciliation with 3rd party payments. There is usually a 1-3 day turnaround before funds paid by a 3rd party are deposited into a business’ checking account. For example: Company A performs Jobs for Companies 1,2,and 3, respectfully, on 3/30/XX. March 30 is on a Monday. Companies 1 and 2 pay via check and company 3 pays via credit card. Checks are recorded and deposited Monday, March 30 at 4:30; the credit card payment is recorded on March 30. Reconciliation is performed April 1 including the credit card payment which has not cleared the bank at the time the reconciliation is completed. This results in a discrepancy in your bank reconciliation which will continue to affect all other reconciliations in the amount of the credit card payment. It is important that you verify when deposits hit your bank by logging into the business’ operating bank account and matching those deposits with payment received via 3rd party merchants that processes your credit card transactions. Doing this before you reconcile will save you or your bookkeeper countless hours in unreconciling and re-reconciling to correct the issue.