The travel industry
The travel Industry is a very transaction-intensive industry in which payments are made either online or in the store. The huge volume of transactions makes reconciliation difficult. Meanwhile, a thorough reconciliation process is absolutely essential to avoid erroneous entries being written off because of unreconciled balances. The travel industry often deals with multiple suppliers. Above all, the major subcontractors give rise to many transactions that are important to reconcile. Larger travel groups also have internal transactions, which cause extensive reconciliation work.
Adra Match gives you:
- Control over each individual transaction
- Reports on all non-matches
- Reports on any charges deducted from the redeemer
- Reports on account balances and differences between companies
- Reports on monthly accounts
- Details of receivables from the redeemer
- Details of which orders have gone wrong
- Differences between company statements in individual unmatched transactions
- A reconciliation process for all companies
- Ability to send open transactions from the system to the other company
- Details of how the receivables/debt should be written up/down with the currencies involved.
Cards and online payments
Card payments are recognised only as a lump sum on a bank statement. This contains all card purchases made online during a specific day, and must be matched against all purchases logged that day. Only the redeemer has details of what the sum shown at the bank contains. A reliable reconciliation is impossible to perform without the details from the redeemer. Without them, you will never know if the difference is due to delayed bank deposits or something else.
When matching transactions, it is important to consider the redeemer’s transaction ID. Different companies use different redeemers to make payment of purchases logged. Some take the fee directly from the gross amount, while others deposit the entire amount in the bank and then invoice the fee.
Direct payments
All customers have to make direct payments through their own bank. As a beneficiary, you have to open an account for each bank, which gives rise to many accounts in different banks. Any direct payment is a transaction on your statement with a unique ID. Direct payments can cause the accounts department to be flooded with multi-page statements from a variety of banks. Reconciliation itself is relatively simple, but is complicated by the many transactions.
Cash payments in shops
Cash often gives rise to very time-consuming reconciliation work, because there are so many transactions. Many items from multiple cost centres hit your bank statement every day. The daily takings system reports to the accounts system daily, but in many cases, 2-14 days can pass before the money is actually deposited into the bank. This makes it particularly difficult to keep track of which cost centres and which day’s sales money has been received.
Card payment in stores
Card terminals cause time-consuming reconciliation work in just the same way as daily takings, because of the many transactions. Once again, there are lots of items from multiple cost centres accounts every day. The cards used at the point of sale can be divided into two different categories. The common debit cards, such as Visa, Mastercard and Eurocard, or credit cards with external redeemers such as American Express and Diners Club.
Debit card
Daily sales that made via an ordinary debit card will be credited to a bank account a few days after the sales location closes its daily trading on the terminal. The sum comes in as the gross amount and the redeemer’s charges are billed retrospectively. Reconciliation is relatively simple to implement, but is complicated by the large volume of transactions.
Credit card
Credit cards show on an account statement as an item for all registered purchases in a lump sum with fees deducted. You cannot see what you are being paid for from the bank account statement. That’s why payments from American Express and Diners Club almost always end up in the settlement account for accounting purposes.
The settlement account is debited manually daily, based on information from the BGC. Either via the bgmax file or paper statements. The proportion of payments via credit card is not so high, but the manual bookkeeping work is very demanding.
Internal balances
Reconciliation of internal balances is complicated, because there are so many factors involved. The complexity increases with the number of companies, currencies and accounts involved. Reporting is often the challenge. The reconciliation process is complicated by the fact that information on what the actual difference consists of is hard to come by. Currency differences or company transactions that have not been registered by both parties also complicate matters.
You can register internal balances in different ways in the accounting system. The use of parties and counterpart numbers is the most common. Sometimes, ledger entries with an invoice number on the transactions only are used. In such cases, the transactions are reconciled at invoice level.
This complexity gives rise to many different types of difficulties, which result in balances between the different companies not being reconciled at the end of the month. A large number of people are often involved, making the process diffuse, and making it more difficult to create uniform practices.
A monthly reconciliation should show account balances and account-level differences between the parties. If currencies are involved, it will also indicate how much receivables or debt should be written up or down, and which individual transactions the difference consists of.