Payment Reconciliation

Payment Reconciliation

Payment reconciliation is the process of matching payments recorded in EquiBillBook with actual bank deposits and statements. This ensures accuracy in your financial records and helps identify discrepancies, missing payments, or errors. Regular reconciliation is essential for maintaining accurate accounts receivable.

What is Payment Reconciliation?

Payment reconciliation involves:

• Comparing payments recorded in EquiBillBook with bank statements
• Verifying that all payments received are properly recorded
• Identifying and resolving discrepancies
• Ensuring payment amounts match bank deposits
• Confirming that all payments are allocated to the correct invoices

Why is Payment Reconciliation Important?

Regular reconciliation helps you:

• Maintain accurate financial records
• Identify errors or fraud early
• Ensure all payments are recorded
• Match payments with bank deposits
• Prepare accurate financial reports
• Comply with accounting standards
• Identify outstanding payments that haven't been recorded

How to Reconcile Payments

Step 1: Gather Your Documents

Before starting reconciliation, collect:

• Bank statements for the reconciliation period
• Payment receipts and records
• Customer payment list from EquiBillBook
• Any outstanding payment records

Step 2: Generate Payment Reports

In EquiBillBook, generate payment reports:

1. Go to Reports → Receivables Reports or Customer Payment Reports
2. Select the date range you want to reconcile
3. Filter by payment method if needed (to match with bank deposits)
4. Export or print the payment report

Step 3: Compare Payments with Bank Statements

Match each payment:

1. Start with your bank statement deposits
2. For each deposit, find the corresponding payment in EquiBillBook
3. Verify that amounts match
4. Check that payment dates are within the expected range
5. Match reference numbers (cheque numbers, transaction IDs)

Step 4: Identify Discrepancies

Look for:

• Missing Payments: Payments in bank but not recorded in EquiBillBook
• Unrecorded Deposits: Bank deposits with no corresponding payment record
• Amount Differences: Payments where amounts don't match
• Date Differences: Payments recorded on different dates than bank deposits
• Duplicate Payments: Same payment recorded twice
• Wrong Allocation: Payments allocated to wrong invoices or customers

Step 5: Resolve Discrepancies

For each discrepancy:

Missing Payments

• Record the missing payment in EquiBillBook
• Match it with the bank deposit
• Allocate it to the correct invoice(s)
• Add notes explaining the late entry

Amount Differences

• Check if the difference is due to bank charges or fees
• Verify the original payment amount
• Adjust the payment record if necessary
• Record bank charges as separate transactions if needed

Date Differences

• Update payment date if it was recorded incorrectly
• Consider timing differences (payment date vs. deposit date)
• Ensure payment dates reflect when payments were actually received

Duplicate Payments

• Identify and delete or cancel duplicate payment records
• Ensure only one payment record exists per transaction
• Verify the correct allocation is maintained

Step 6: Mark Payments as Reconciled

After verification:

• Mark reconciled payments in your records
• Maintain reconciliation documentation
• Note any exceptions or outstanding items
• Update reconciliation status for reporting

Reconciliation Methods

Manual Reconciliation

For small businesses or low transaction volumes:

• Print payment reports from EquiBillBook
• Compare with bank statements manually
• Mark items as reconciled on paper or in a spreadsheet
• Resolve discrepancies one by one

Bank Statement Import (If Available)

If your bank supports statement import:

• Import bank statements into EquiBillBook
• Use automated matching features
• Review and confirm matched transactions
• Manually match unmatched items

Reconciliation Frequency

Recommended reconciliation frequency:

• Daily: For high-volume businesses
• Weekly: For medium-volume businesses
• Monthly: For low-volume businesses (minimum recommended)

More frequent reconciliation makes it easier to identify and resolve issues quickly.

Reconciliation Reports

Use these reports for reconciliation:

• Customer Payment Report: Lists all customer payments for a period
• Payment Method Report: Payments grouped by payment method
• Accounts Receivable Report: Shows outstanding balances and payments
• Bank Reconciliation Report: Payments by bank account
• Customer Statement: Payment history for specific customers

Best Practices for Payment Reconciliation

• Reconcile payments regularly (weekly or monthly minimum)
• Keep all payment documentation organized
• Record payments as soon as they are received
• Use reference numbers to match payments with deposits
• Document all discrepancies and their resolutions
• Review reconciliation reports before closing periods
• Train staff on proper payment recording procedures
• Establish clear reconciliation procedures and timelines
• Maintain audit trail of all reconciliation activities
• Address discrepancies promptly to avoid accumulation

Common Reconciliation Issues and Solutions

Issue: Payment Not Showing in Bank

Possible Causes:

• Cheque not yet cleared
• Payment recorded before actual receipt
• Payment returned or bounced

Solution: Wait for clearance, verify payment status, or adjust payment date

Issue: Bank Deposit Doesn't Match Payment Amount

Possible Causes:

• Bank charges deducted
• Multiple payments combined in one deposit
• Recording error

Solution: Account for bank charges, separate combined payments, or correct the amount

Issue: Payment Allocated to Wrong Invoice

Solution: Reallocate the payment to the correct invoice and update records

Reconciliation Checklist

Use this checklist for each reconciliation:

• □ Gather all bank statements and payment records
• □ Generate payment reports from EquiBillBook
• □ Match each bank deposit with payment records
• □ Verify payment amounts match deposits
• □ Check payment dates are reasonable
• □ Match reference numbers
• □ Identify and resolve all discrepancies
• □ Record any missing payments
• □ Update incorrect payment records
• □ Document reconciliation completion
• □ File reconciliation documentation

Related Articles

Learn more about:

• Recording Customer Payments
• Multiple Payment Methods
• Payment Receipt Generation

Payment reconciliation is a critical accounting process that ensures the accuracy of your financial records. Regular reconciliation helps maintain data integrity, identify issues early, and provides confidence in your accounts receivable management.