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How Automating Reconciliation Can Save You Hundreds Of Dollars Every Month

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How Automating Reconciliation Can Save You Hundreds Of Dollars Every Month

  1. 1. But first,
  2. 2. What in merlin’s beard is Account Reconciliation? But first,
  3. 3. To understand this, let’s take a look at a very basic and everyday process for most companies.
  4. 4. For most online businesses, transactions are made online and processed by a Payment Gateway.
  5. 5. The Books The information about invoices sent to your customers.
  6. 6. The Gateway The details of the transactions from the payment gateway.
  7. 7. The Bank The credit statement from your bank account.
  8. 8. But here’s the catch. The customer’s invoice information at the books look like this:
  9. 9. Invoices/Transactions Customer 1 - Invoice 001 - $99 - Paid on 2nd Jan Customer 2 - Invoice 002 - $99 - Paid on 2nd Jan Customer 3 - Invoice 003 - $99 - Paid on 2nd Jan Customer 4 - Invoice 004 - $99 - Paid on 2nd Jan Customer 5 - Invoice 003 - $99 - Paid on 2nd Jan But here’s the catch. The customer’s invoice information at the books look like this: Total = $495
  10. 10. And the statement from the bank looks like this:
  11. 11. And the statement from the bank looks like this: Bank Transactions Sum of $490 credited to the account on 4th Jan
  12. 12. And the statement from the bank looks like this: Bank Transactions Sum of $490 credited to the account on 4th Jan $495 $490 Unreconciled data:
  13. 13. This happens since the gateway transfers the amounts in bulk to your bank account at the end of the day or after a few days.
  14. 14. Also, the Bank Transaction Statement doesn’t contain key information like: The details of customers who have successfully made the payment The transactions that are still in the process Gateway processing fees
  15. 15. Hence it's necessary for a method to reconcile the information gap between the Books, and the Bank, with the information from the Gateway Statement.
  16. 16. As we speak, accountants are spending hours upon hours of their time doing this process of Reconciliation manually.
  17. 17. They are desperately muddling through huge amounts of data from various sources (Billing System, Gateway Statement, Bank Statement) in an effort to reconcile payments.
  18. 18. Here’s how Chargebee has solved the problem for you.
  19. 19. We aggregate all the necessary information in one place for easy comparison and reconciliation.
  20. 20. We do this by introducing a Gateway Bank Account into your accounting (Xero/QuickBooks) software.
  21. 21. We do this by introducing a Gateway Bank Account into your accounting (Xero/QuickBooks) software. Here’s an overall flowchart of how we do it.
  22. 22. Xero/QuickBooks (The Books)
  23. 23. Reconciliation inside Xero Review and click on OK Now, find the most probable matches without digging into oceans of transactional details.
  24. 24. Before Reconciliation
  25. 25. Invoices/Transactions Customer 1 - Invoice 001 - $99 - Paid on 2nd Jan Customer 2 - Invoice 002 - $99 - Paid on 2nd Jan Customer 3 - Invoice 003 - $99 - Paid on 2nd Jan Customer 4 - Invoice 004 - $99 - Paid on 2nd Jan Customer 5 - Invoice 003 - $99 - Paid on 2nd Jan Bank Transactions Sum of $490 credited to the account on 4th Jan Total = $495
  26. 26. Invoices/Transactions Customer 1 - Invoice 001 - $99 - Paid on 2nd Jan Customer 2 - Invoice 002 - $99 - Paid on 2nd Jan Customer 3 - Invoice 003 - $99 - Paid on 2nd Jan Customer 4 - Invoice 004 - $99 - Paid on 2nd Jan Customer 5 - Invoice 003 - $99 - Paid on 2nd Jan Bank Transactions Sum of $490 credited to the account on 4th Jan Total = $495 Unreconciled data!
  27. 27. After Reconciliation
  28. 28. Invoices/Transactions Customer 1 - Invoice 001 - $99 - Paid on 2nd Jan Customer 2 - Invoice 002 - $99 - Paid on 2nd Jan Customer 3 - Invoice 003 - $99 - Paid on 2nd Jan Customer 4 - Invoice 004 - $99 - Paid on 2nd Jan Customer 5 - Invoice 003 - $99 - Paid on 2nd Jan Gateway Statement Transaction processed, for $99 Transaction processed, for $99 Transaction processed, for $99 Transaction processed, for $99 Transaction processed, for $99 Processing Fee - $5.00 Transfer $490 to Bank account on 4th Jan Bank Transactions Sum of $490 credited to the account on 4th Jan
  29. 29. Invoices/Transactions Customer 1 - Invoice 001 - $99 - Paid on 2nd Jan Customer 2 - Invoice 002 - $99 - Paid on 2nd Jan Customer 3 - Invoice 003 - $99 - Paid on 2nd Jan Customer 4 - Invoice 004 - $99 - Paid on 2nd Jan Customer 5 - Invoice 003 - $99 - Paid on 2nd Jan Gateway Statement Transaction processed, for $99 Transaction processed, for $99 Transaction processed, for $99 Transaction processed, for $99 Transaction processed, for $99 Processing Fee - $5.00 Transfer $490 to Bank account on 4th Jan Bank Transactions Sum of $490 credited to the account on 4th Jan
  30. 30. Thus, Chargebee helps you with Reconciliation of payments and clears the information gap between the Books and the Bank.
  31. 31. Happy?
  32. 32. Happy? Wait, there’s more!
  33. 33. You can now use Chargebee’s Google Chrome Plugin to automate the Reconciliation process, no more clicking a 1000 ‘OKs’.
  34. 34. You can now use Chargebee’s Google Chrome Plugin to automate the Reconciliation process, no more clicking a 1000 ‘OKs’. Now, reconcile with just a click of a button!
  35. 35. Ta da! You just saved yourself 5 work hours every week, with efficient Reconciliation methodology in place.
  36. 36. Ta da! You just saved yourself 5 work hours every week, with efficient Reconciliation methodology in place. A small back of the envelope calculation of the possible amount saved (depends on the size of the business): 5 hours * 30 dollars per hour = 1500 dollars per week
  37. 37. To read more about Xero Reconciliation in Chargebee, go to: https://www.chargebee.com/docs/xero-reconci liation.html
  38. 38. Join our newsletter to receive regular insights on SaaS business. Head to our blog to sign up! https://www.chargebee.com/blog/
  39. 39. Thank you for reading!

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