Exploring Automated Solutions for Credit Card Reconciliation in Small Businesses
Introductory Note: Please keep in mind that I’m not a finance expert, so my understanding is somewhat limited.
I work for a small business that has grown to about 40-50 employees. Traditionally, the company relied on very outdated processes (we only recently moved away from paper timesheets). These methods were manageable when there were just 10 employees, but as our team has expanded, these practices have become inefficient. Unfortunately, I’ve been tasked with handling a job that falls outside my typical responsibilities, and it’s becoming a bit overwhelming.
Currently, we handle our credit card reconciliation in a labor-intensive manner. I download the monthly statement from Amex, manually enter the data into an Excel spreadsheet, track down any related invoices, and finally upload everything to SharePoint. From there, our finance team takes over and enters the data into QuickBooks.
This process has become increasingly burdensome. Surely, larger businesses aren’t managing their finances this way, right? I suspect there’s software available to streamline this process, but I’m unsure what to search for to suggest a viable solution.
One response
Automating credit card reconciliation can significantly streamline your workflow, reduce errors, and save time. Here’s a step-by-step guide on how you can automate this process for your small business, peppered with considerations and tools you might explore:
Step-by-Step Automation Process
Document each step you currently perform manually. This will help in understanding where automation can have the most significant impact.
Research Reconciliation Software:
Look into software tools designed for automating financial tasks. Some popular options are:
Set Up Bank Feeds:
Most modern Accounting Software allows you to connect your bank and credit card accounts directly to their system. This feature automatically imports transactions, reducing the need for manual entry.
Automate Invoice Collection:
Use tools like Hubdoc or the built-in features in QuickBooks and Xero to capture and digitize invoices. These tools can fetch invoices from your email or even snap pictures of physical receipts, storing them in a searchable format for easy access.
Create Rules for Reconciliation:
Leverage automation rules within your Accounting Software. For example, set up rules that automatically match common expenses with the appropriate accounts to auto-categorize transactions.
Regularly Review and Adjust:
Although much of the process can be automated, it’s crucial to review the reconciliations regularly for any mismatches that require manual intervention. Set up a monthly review schedule to ensure everything aligns.
Train Your Team:
Conduct training sessions with your team to ensure they understand the new systems. Training will help in smoothly transitioning from a manual to an automated process and increase the overall efficiency of the team.
Consult with Your finance Team: