Best Practices for Ecommerce Payment Reconciliation
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In the past year, businesses of all kinds have been forced to change their operations and adopt e-commerce shopping platforms drastically. With online shopping becoming more popular, the number of payment processors accepting contactless and online payments has risen. Aside from this, consumers have also changed their shopping habits, preferring to shop online and receive deliveries rather than going to stores.
Keeping track of how much money sellers should receive from multiple marketplaces can be pretty overwhelming. In some cases, this is a significant problem when the incoming money is reinvested in the business. If your marketplace and your logistics provider or wholesaler don’t follow the same payment cycle, it can cause you a great deal of trouble. Ecommerce platforms today require emerging sellers to have a robust payment reconciliation system that handles all payments.
The digital shift toward e-commerce has impacted business operations in the back office. Automating e-commerce transaction reconciliation will help e-commerce firms remain competitive while handling multiple payment vendors. Find out how you can enhance your e-commerce reconciliations and future-proof your Office of Finance by implementing these best practices.
1. EVALUATE YOUR EXISTING RECONCILIATION PROCESSES
In addition to being a repetitive and often tedious process, balance sheet reconciliations are also liable to cause bottlenecks and risk for a firm’s financial close. Identifying potential challenges and correcting them before they grow into more significant issues can help e-commerce organizations establish a more robust reconciliation workflow.
Due to the sheer volume of transactions in an e-commerce business, reconciliation processes with an unstandardized and manual approach inevitably lead to risky data entry, regulatory and compliance issues, among others. Further, if reconciling transactions is still performed manually and using spreadsheets, the tedious nature can result in workflow inefficiency, bottlenecks, and delays.
If your F&A team struggles with reconciliation, ask them where they work most. Are you spending more time on reconciliations because you need to keep track of them every day? Is there a time-sensitive deadline they are missing? How much time is being spent on status meetings and emails because of the lack of visibility? In addition to preventing potential challenges from compounding, identifying current challenges also enables economic transformation to make those challenges a source of growth.
2. PRIORITIZE PEOPLE ALONGSIDE PROCESSES AND TECHNOLOGY
Organizations often emphasize RPA (Robotic Process Automation) and digital transformation, but they also must prioritize their people. A failure to train your F&A team before implementing economic transformation technology further decreases your chances of success. The return on investment in your transformation journey is drastically improved when you refine your talent and equip them with the skills they need to succeed.
3. EMBRACE FINANCIAL TRANSFORMATION TO MEET CURRENT DEMANDS
E-commerce retailers must stay on top of the digital economy if they want to meet the needs of their customers and implement contactless and online payment solutions.
As a result of third-party delivery services, such as UberEats and GrubHub, in addition to online payment services, such as Apple Pay and PayPal, retailers are faced with a complex business workflow. Accountants now have multiple vendors to reconcile daily. Before, accountants tracked point-of-sale (POS) transactions with credit card transactions to bank statements; however, the most significant burden was managing credit card fees. Now that credit cards are integrated with high-volume transactions, handling credit card reconciliations manually has become highly complicated.
Record to Report (R2R) processes that used to be manual and time-consuming have become obsolete and inefficient as demands for performance and compliance continue to grow. Therefore, e-commerce retailers must understand that postponing the economic transformation of their business costs them more than the actual transformation itself.
4. STANDARDIZE AND AUTOMATE YOUR RECONCILIATIONS IN TANDEM
E-commerce retailers struggle to reconcile multiple accounts in the current economy due to the proliferation of different payment vendors, so the economic transformation is the perfect opportunity. Rather than automating reconciliations without standardizing them first, organizations should automate their reconciliations in parallel with standardized reconciliations. Utilizing technology to expedite a flawed and disorganized process presents additional risk to companies. Organizations can achieve a quicker return on investment by laying the proper foundation for financial automation.
Adopting these best practices will allow e-commerce companies to leverage the existing challenges as opportunities fully, upskill their people, and embrace processes and technology and standardize and automate their reconciliations simultaneously.
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