Reconciliation of transactions is an important part of every regulatory authority’s accounting workflows. Regular account reconciliation helps ensure all transactions are accounted for, tracks down specific payments, and helps identify and prevent potential accounting errors.
The reconciliation process can be broken down into three stages; reconciling the electronic payments recorded between your bank and your payment processor, reconciling the electronic payments recorded by Alinity with those provided by the payment processor, and finally reconciling any additional cash or cheque payments recorded in Alinity with those recorded by your bank. In this video, we’ll take a closer look at the Alinity/Payment processor reconciliation process.
While reconciling transactions has always been an important part of the accounting workflow, version 6 of Alinity has greatly simplified the process.
The latest version no longer uses payment batches, as General Ledger entries are created automatically when a payment is made. This means you don’t have to close or export batches, or enter control counts and amounts. It also means reports are no longer bound by batches of payments, but instead are constructed according to dates you specifically choose. In this case, we’re going to select the first and last date of the previous month for our report parameters, then let the report compile.
Once the report has compiled, we can export it to either an Excel, Word, or PDF file. In our experience, Excel files are best for reconciliation tasks because they’re easily manipulated, but you can use whatever file format you’re most comfortable with.
Next, we’ll head to our payment processor login page. In this case, we’re demonstrating using Moneris, but the procedures should be similar across most electronic payment processors.
Navigate to the Reports tab, then select the Transactions report. Select the same date range used in the Alinity reports for accurate transaction reconciliation. Include Debit as an option even if you don’t offer it, as payment processors may register prepaid cards as debit cards. While Alinity does record declined and incomplete transactions, they’re not included in the Deposit Details report, so you don’t have to include those options.
The fastest and most efficient way to reconcile your electronic transactions is to simply compare the totals on both reports. If the total recorded by Alinity matches that provided by your payment processor, the reconciliation is successful and you can simply move on to cash and cheque transactions.
But what happens when there’s a discrepancy?
Discrepancies are exceedingly rare, but they do occasionally happen. When they do, they’re most often caused by a communication failure between the payment processor and Alinity. The result is a Pending transaction, where the payment has successfully processed in Moneris but Alinity hasn’t received confirmation.
Finding those pending transactions is easy. Just navigate to the Accounting > Payments screen, and click the Filter button.
This expands the filter area, where you can select the Pending status. You can also set the start and end dates to match your reports.
Now locate the appropriate transaction on the payment processor report by searching the payment processor report for the registration number associated with the pending payment. In Moneris, the registrant number will appear in the Customer ID column, but other payment processors may use different conventions.
Once you’ve located the transaction, note the date and time of the transaction, then copy the Order ID.
Now return to Alinity, select the transaction, add a processor message, put in the appropriate time information, and paste in the Order ID. When you Save, Alinity will automatically create the appropriate journal entries.
To confirm that the process completed, we can run the deposit details report again and now the totals between the two reports should match.
Once all the payment processor transactions have been reconciled, we’ll be left with only the physical transactions. Now it’s a simple matter to take the remaining transactions and reconcile them with your bank statement.
Reconciliation is an important part of the accounting workflow, but all too often is a tedious and time-consuming effort, but with the latest version of Alinity, you can dramatically simplify the process.
For more information about Alinity’s Accounting features, or to arrange a free demonstration, contact us today!
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