Start with matching dates and scopes
Gross card sales reported by your POS or ecommerce system may not equal the bank deposits posted on the same day. Payment batches can settle in another period, and the deposit can reflect more than current-day sales.
Before calculating a discrepancy, identify the merchant account, business location, sale date, batch cutoff, settlement date, bank posting date, and which payment channels are included. The bank's posting date does not necessarily match the customer's purchase date.
Identify the different kinds of adjustments
- Refunds: money sent back to customers, not the same as a processing fee.
- Dispute debits: amounts involved in chargebacks or related activity under the applicable process.
- Provider fees: may be netted from funding or invoiced separately.
- Reserves or holds: funds restricted or retained under defined risk arrangements.
- Timing: batches crossing settlement windows, holidays or other cutoff conditions.
- Non-card payments: ACH, cash, checks and other tender types may appear elsewhere in reports.
A made-up reconciliation example
Suppose a fictional account reports $10,000 in settled gross card sales during the relevant grouping. Illustrative deductions consist of $400 in refunds, $80 in dispute debits, $120 in fees netted from funding and $500 withheld in a reserve. Simplified arithmetic yields $8,900 for this example.
Important: This arithmetic is purely illustrative. A real processor may bill fees separately, hold different funds, post multiple deposits or apply other adjustments. Even the resulting amount may be deposited on a different date.
A five-step reconciliation workflow
- Export permitted POS sales and refund totals for the defined period, omitting sensitive cardholder data from general records.
- Collect the corresponding merchant-level batch and settlement reports.
- Group transactions and adjustments by settlement or deposit reference, not only sale date.
- Match net settlement amounts against actual bank entries and investigate exceptions.
- Document unmatched items, timing differences and the party responsible for explaining them.
What not to assume
Deposits not equaling gross sales does not automatically indicate fraud, improper fees or a provider mistake. Conversely, a reconciliation that stays unexplained should not be dismissed as 'normal.' Ask for supporting transaction and funding detail from the responsible provider.
What to do with your findings
Separate recurring operational gaps from a one-time posting difference. If the reporting is consistently difficult, improving the provider's reconciliation tools or changing system configuration may solve the problem without switching processing companies.
Use the Merchant Reality Audit to evaluate costs, technology, funding and support as one business problem rather than focusing on a single bank deposit.