One of the most powerful ways busy accounting teams can unlock time for higher-value risk management and data analysis is by automating as much of the credit card reconciliation process as they can.
BlackLine’s Transaction Matching tool offers powerful ways to help finance teams identify and review higher-risk credit card transactions. The tool automates the vast majority of routine purchases that fall within the organization’s policies and risk tolerance.
Using BlackLine, data from a variety of sources including data feeds from the organization’s bank and credit card issuers can be downloaded and matched automatically (typically overnight). BlackLine reconciles transactions that match details within the various data feeds and identifies the small minority of transactions that require corrections or human investigation.
Multi-Tiered Transaction Matching
One of the challenges finance teams face in reconciling credit card payments is the fact that every transaction will generate data from several sources. A purchase will typically create separate records from the point-of-sale (POS) system, payment processor, and potentially the organization’s general ledger.
This results in a need for two- or three-way matching in which a transaction must be reconciled. First, between the POS system and processor. Then, between the processor and the organization’s bank. And each transaction will have several data fields including the amount, date, and authorization code that need to match for a transaction to be reconciled.
As BlackLine reviews credit card data fields, it sorts transactions into three broad categories:
Matched Transactions
Transactions for which key details are identical in all the data sources are sorted into the “matched transactions” category. Generally, this will include most of a company’s credit card purchases.
Suggested Matches
Transactions for which most, but not all, of the key details are identical are routed into a “suggested matches” category for review by the finance team. This will typically include transactions such as amounts higher than a pre-set limit for a spending category or missing an authorization number.
In these instances, the finance team can provide any missing data and approve the reconciliation or set it aside for further review.
BlackLine’s matching logic can also be adjusted to account for typical exceptions. For instance, it’s not uncommon for a transaction to clear the payment processor a few days later. The organization can establish a tolerance within the matching rules that says if the other details are the same, but the dates are off by four days, the transaction can be matched automatically.
Unmatched Transactions
The final category, “unmatched transactions,” would require manual review by the finance team. This will typically be a small fraction of the overall credit card transaction volume.
Overall, this automated transaction review and matching streamlines an onerous reconciliation process and frees up the finance team’s time for higher-value activities that contribute more directly to the organization’s performance and success.
To begin taking advantage of BlackLine’s powerful transaction matching tools, contact us today.
