In today’s business world, characterised by rapid dynamism and constant technological evolution, efficiency and accuracy in financial management have become fundamental pillars for the success and sustainability of medium and large-sized enterprises.
One of the areas that has experienced significant transformation thanks to technological innovation is the reconciliation of payment and collection platforms, which include both digital solutions and traditional Point of Sale (POS) terminals, among others.
However, the growing demand in sectors such as e-commerce, cryptocurrencies, and digital payments has led to transaction volumes reaching unprecedented levels, increasing the complexity of the process and complicating bank reconciliation.
Fortunately, digitalisation has enhanced the prospects and the way companies conduct their accounting processes. The automation of this process not only represents an advancement in how businesses handle their financial transactions, but also provides a tangible positive impact on their overall operation.
The reconciliation of payment and collection platforms is the process through which transactions made via different collection channels, such as digital platforms or POS terminals, are verified to ensure they are accurately and consistently recorded in a company's accounting books.
It is a system analogous to bank reconciliation, with the difference that, rather than solely involving accounting systems registered in an ERP regarding bank accounts, it also takes into account payment platforms such as PayPal, Stripe, Adyen, 2Checkout, and traditional POS systems like Redsys.
Although sometimes not given the importance it deserves, this process is essential to ensure the accuracy of financial records and to identify and correct any discrepancies that may affect the financial health of the organisation. In fact, for many companies, especially those operating in e-commerce, it is a necessity rather than merely an added value.
Currently, the cash flow generated through payment platforms faces multiple challenges that can impact operational efficiency, the accuracy of accounting records, and ultimately, the financial health of organisations.
Some of the main challenges associated with this practice are as follows:
Despite the increasing complexity in the current business reality, automation in the reconciliation of payment transactions presents itself as an innovative solution that eliminates the need to perform these processes manually, which are prone to errors and time-consuming.
The implementation of automated systems allows companies to efficiently process large volumes of transactions, significantly reducing the risk of human errors and optimising staff time so that they can focus on higher-value tasks.
So far, we all recognise the importance of the bank reconciliation process and the need for its automation. The implementation of generative artificial intelligence in Embat's accounting and bank reconciliation functionality has simplified this process. However, integrating other payment platforms, such as PayPal or credit cards, presents additional challenges.
Fortunately, while it may be a complex solution to implement, it is indeed more than possible. There are ways to automate this reconciliation with external systems beyond banks. Below, we review some of the fundamental steps to achieve this.
The initial step involves integrating the company's financial management system, treasury management system, or ERP (Enterprise Resource Planning) with both banks and payment platforms.
On one hand, this is necessary to obtain initial payment data from these payment platforms, and on the other hand, it is also important that once this information is recorded in the bank's records, it is essential to receive it alongside the electronic account statement.
While there are various ways to realise this functionality, this integration can be achieved through banking APIs (Application Programming Interfaces), which allow for the secure and efficient exchange of financial data in real-time.
Generally, payments made with credit cards and other payment platforms entail a high volume of transactions, especially when compared to other accounting records. Therefore, it is crucial to have automatic reconciliation tools in place to ensure no record is lost and to avoid human intervention.
The most advanced tools allow, through the use of artificial intelligence and similar technologies, to compare accounting records with payment platform records and automatically reconcile those that match. In most cases, the volume of transactions to be reconciled will be reduced to the minimum necessary.
Although, as we have seen, modern bank reconciliation systems automate this process as much as possible, a manual review process is necessary to detect and correct identified discrepancies.
Companies can establish procedures to investigate and resolve these differences, which may include correcting errors in accounting records or communicating with the bank or payment platform to clarify discrepancies.
Automatic bank reconciliation tools generate detailed reports that facilitate the monitoring and auditing of reconciled transactions. For example, they allow users to see, for a particular account or entity, how many transactions remain to be reconciled and if there are records that allow for that reconciliation.
These reports are fundamental for financial analysis, decision-making, and compliance with regulatory requirements.
The automation of bank reconciliation is not a static process. It is a model that demands a cycle of continuous improvement, regularly assessing the effectiveness of the reconciliation process and adjusting rules and procedures according to the reality and needs of each company.
In fact, it is normal for the implementation of a bank reconciliation process to require such evolution, taking into account the volume of transactions and the complexity of the process.
In summary, reconciling different payment platforms is an essential process to ensure the accuracy and integrity of a company's financial information.
By automating this task, organisations can significantly improve their operational efficiency, reduce the risk of human errors and discrepancies in transactions, and free up valuable resources that can be redirected towards more strategic activities. Moreover, the automation of bank reconciliation provides real-time visibility of the company's financial position, especially in a process with such high volume, which is crucial for effective cash flow management and informed decision-making.
With the use of advanced technologies and the implementation of appropriate processes, companies can establish a robust and reliable reconciliation system that supports their financial operations in an increasingly digitised and complex environment.
This enhances relationships with banks and payment platforms, and strengthens stakeholder confidence in the accuracy of the company's financial reports.
