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Point of sale reconciliation is an essential process in any business. In fact, it’s one created to prevent fraud and theft within a single accounting period. However, there are some mistakes that you might not be aware of which could lead to serious consequences for your company.
The “pos reconciliation reliacard” is a process that reconciles the bank account with the credit card statement. This article will show you how to do it in 6 steps.
The act of manually comparing your POS sales records to your cash on hand and credit card processing statements to verify there are no inconsistencies is known as POS reconciliation. While POS reconciliation may be done at any time, more regular audits guarantee that any discrepancies are quickly recognized and corrected. Most firms find that auditing cash and credit card transactions at the conclusion of each work day is the best practice.
POS reconciliation was one of the most tedious routine jobs for me as someone who spent many years managing day-to-day operations in a retail spa. It was, however, critical for detecting cash mismanagement and wrongly recorded credit card payments (at a spa, a mismatched credit card charge frequently meant a tip for an employee was charged to the client but not credited to the staff’s account—which you obviously want to solve!).
What Is POS Reconciliation and How Does It Work?
Although doing POS reconciliation is simple, it may be a tedious operation. There’s a lot of numerical cross-referencing from one screen to the next (or printed statement to printed statement). It is, nonetheless, worthwhile to confirm that your transaction statements and actual sales are correct.
1. Collect the materials you’ll need
The day’s POS sales transactions (most POS systems can run an end-of-day register or Z report), credit card processing batch statements, a cash drawer ready for counting, and receipts or logs from any cash deposits taken from the register into the safe or bank during the day are also required.
2. Compare Card Transactions to Statements & Note Discrepancies
Examine the detailed transaction listings in your POS for each sale or refund for the time you’re reconciling. Compare your credit card batch statements and mark them if they’re the same. Make a note of it if they don’t line up.
3. Compare Cash Transactions to Cash on Hand & Note Discrepancies
Add up all of your cash sales for the day and compare it to the amount of cash in your registers. It’s a good idea to start each day with the same amount of cash since it’ll be simpler to reconcile cash transactions, as I mention in the recommended practices below. Make a note of any inconsistencies you see.
4. Correct any errors that are obvious and fixable.
This is when some detective work comes in handy. Although not every difference will have an obvious cause or solution, by keeping track of transactions at the end of each day, you will ultimately see trends and be able to reconcile them.
A $20–$40 card charge not tied with a particular purchase (and so displaying as a cash overage) was frequently a tip that needed to be transferred to an employee at the spa where I worked. We could see which staff provided their service and apply the tip by looking into previous transactions linked with the client that day.
Depending on your POS system, you may be able to make changes to transactions until the end of the business day or after the register is formally closed. To put it another way, the sooner you see these patterns or faults, the simpler it will be to correct them.
5. Keep track of each POS reconciliation session in a log.
If you maintain a running diary of all reconciliation sessions, your bookkeeper or accountant will be forever grateful. For credit card statements and cash transactions, make a note of the date, any inconsistencies, and the totals.
6. Provide Accountant or Tax Professional with POS Reconciliations
Your accountant may ask for your logs on a regular basis or when it’s time to file taxes. When they’re required, provide them.
The Advantages of Performing a Point-of-Sale Reconciliation
One of the finest aspects of a POS system is that it generates analytics and reports automatically, giving you a comprehensive picture of your company’s health. They also provide services like inventory monitoring, staff management, and bookkeeping.
So, why conduct the POS reconciliation procedure by hand? You’ll have a better grasp of your company demands and may avoid long-term accounting problems if you cross-reference each transaction with your POS records.
The following are six of the most significant advantages of POS reconciliation:
Notifies you of any accounting mistakes.
It’s critical to keep your books up to date. You’ll be able to spot discrepancies—and even uncover patterns—every time you compare your transactions and cash-on-hand with your POS data, allowing you to halt the mistakes.
Cash deposits are kept safe.
You must be aware of the amount of money you deposit each day. After you make the deposit at the end of the day, it’s impossible to see if you made a mistake.
In the long run, it saves money.
A expensive error is inaccuracy in accounting. Uber committed a minor accounting mistake by taking its commission before taxes and fees; as a consequence, Uber has promised to reimburse the money, plus interest, totaling around $50 million.
Keeps you up to date on the state of your company.
Regular reconciliation may provide you a better view of your organization and how it’s operating, in addition to spotting mistakes and unlawful transactions. You’ll learn about hot-selling things and products that aren’t selling, and you’ll be able to make smarter business judgments as a result.
Emphasizes employee accomplishments
POS reconciliation can assist you discover which of your staff are your best salespeople, similar to the previous advantage of understanding your company’ general health. On the other hand, you’ll be able to see who’s making monetary errors and maybe spot crooks among your employees.
Allows you to keep track of inventories.
Of course, either your POS system or a third-party solution includes inventory tracking and management functions built in. POS reconciliation, on the other hand, offers you a better picture of what’s in your backroom, what has to be restocked, and how quickly specific things are selling.
Best Practices for POS Reconciliation
It’s OK if you haven’t been doing frequent POS reconciliation. You’ve decided to do it now, and it’s critical that you follow a few POS reconciliation best practices. It’s up to you how frequently you complete POS reconciliation; most merchants that operate a high-volume firm do it every day. These pointers will assist you in ensuring that your books are correct and that you are not losing money.
- Integrated credit card processing: Because the finest POS hardware often has integrated payment processing terminals, you should experience minimal mistakes. The less physical work people have to perform, the less likely they are to make mistakes.
- Limit one employee per register: When doing POS reconciliation, it will be simpler to discover difficulties if you limit one person per register. If you have more workers than registers, you may assign codes to each employee to utilize. Set your POS to ask for their code or login automatically before each sale or transaction. This ensures that everyone is held responsible.
- Assign POS reconciliation to a manager, department head, or even your accountant: As the owner, you may execute POS reconciliation yourself, or you could delegate the duty to a management, department head, or even your accountant.
- Every day, start with the same amount of money: To make reconciling at the end of the day or shift considerably simpler, start each day with the same amount of cash.
- Don’t miss a day of POS reconciliation if you want to complete it every day. You may do it once a week, twice a month, or once a month.
Conclusion
You may avoid potentially large accounting mistakes by comparing your predicted sales (those in your POS software) to the actual amounts from your credit card processing statements and cash drawers on a frequent basis. You could notice thieving tendencies or little inconsistencies that build up to large losses over time.
Performing POS reconciliation is one of the more monotonous aspects of running a retail company, but it’s also one of the most satisfying. You’ll have a greater understanding of your company’s health, who’s doing well or poorly in sales, what’s selling and what isn’t, and, maybe, what’s eating away at your earnings. You’ll be able to make better-informed company judgments if you consistently consume all transaction data.
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The “end of day cash reconciliation form” is a paper form that tells the financial institution how much money has been deposited and how much money has been withdrawn. It also includes information about what the bank’s policy is for depositing and withdrawing cash from an ATM.
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