What is corporate credit card reconciliation?
Corporate credit card reconciliation is the process of comparing the transactions on the company card statements to the ledger accounts maintained by the company. The major purpose of this is to guarantee the validity and accuracy of the transactions. Any differences that surface during the process need to be addressed right away and resolved. This is a crucial stage in the process of closing out a company's accounts. Every business has a different frequency, whether it be biweekly, monthly, or another.
Types of credit card reconciliation
Statement-based balancing
When you use a business credit card to make transactions, statements are often received. You must thus compare the charges made on your organization's behalf to the entries on the credit card bill. The total number of corporate credit cards in use at any given moment will determine how many reconciliations are required.
Reconciliations of commercial services
When your clients pay you through a merchant account provider, you need to reconcile your merchant services. Since the merchant provider is merely acting as a mediator, it is crucial to balance these transactions as soon as possible because they represent the revenue side of your company.
Why is corporate credit card reconciliation important?
You can double-check your expenses using credit card statements. Many companies or individuals pay their taxes without giving it a second thought. This can be a really bad decision because it could cause even worse issues in the future. As soon as businesses receive their credit card statements, your finance team should verify the costs against their internal records. Any differences might be more easily resolved now rather than later.
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