Looking at your merchant account statement can sometimes be confusing, but attempting to reconcile it with your point-of-sale (POS) sales reports can sometimes be more complicated. It is very rare that merchant account providers or POS systems make errors in calculations, but it may happen. The most common reason you may not be able to correctly match them is due to accounting standards and time period variations.
Here are the most common reasons:
1. Compare the “credit card” revenue from your POS report (not total) to the deposit item listed on the merchant account statement. The total includes other forms of payment including cash and check.
2. Daily Discounts: Merchant account companies charge (i.e. discount) the fees either on a daily or monthly basis. If it is on a daily basis, then the deposit will be less than the revenue. Typically merchant account providers will only debit a small portion of the fess daily and a larger portion at the end of the month. The larger portion will be in the form of a debit from your bank account at the beginning of the month following the end of the billing period.
3. Settlements: In most instances (unless auto settle is available), the way the merchant account provider is informed that you like to end the period of transactions is through settlement. Most businesses will “settle” daily; however, one can also settle every two or three days. Alternatively, one can also settle two or three times a day. In both instance, the daily POS sales report will not match a line item on the merchant account and your bank may receive multiple deposits for the same day.
4. Deposit: Depending on the merchant account provider there is a difference between the day the transactions are settled and the day they are deposited. This will also vary on the statements that are provided. As an example, a transaction completed on July 31 and settled the same night will be deposited in August and likely appear on the August statement, therefore the daily sales report for the month of July and the merchant account statement for the same month will naturally vary.
5. Gift Card/Lottery Sales: There are items such a gift cards (and also lottery tickets) that are not considered a revenue and may therefore be excluded from the daily sales report. Many reports concentrate on sales of good and services. Gift cards and lottery cards where the store selling it is not necessarily the recipient of the eventual revenue are not considered sales, but rather a liability. In case of gift cards, the funds are typically transferred to an escrow account and in case of lottery funds are forwarded to the agency (California Lottery Commission, New York Gaming Commission, etc.)
Have more questions about merchant account processing or POS systems? Contact us.
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