Your business collected payments. Your processor sent money to your bank. Now you need to confirm that the two agree.
Matching transfers to sales, also called payment reconciliation, means tracing the money deposited in your bank back to the payments and adjustments that produced it. A difference deserves an explanation, but it does not automatically mean a payment is missing or your processor charged an unexpected fee.
This guide gives retailers, auto repair shops and service businesses a practical process for finding that explanation.
1. Gather the records for one transfer
Start with three records: your card-payment report, your processor’s transfer or payout detail, and the posted bank deposit.
Choose one transfer and record its reference number, amount, destination account and status. Use transaction identifiers to connect the included payments to receipts, invoices or repair orders.
For Square users, transfer details identify included card payments and related trace information. Transaction details can be exported as a CSV from Square Dashboard. Businesses sharing one bank account across locations can also use transfer tags, although Square excludes instant and same-day transfers from that feature. Square: Match transfers to sales.
With another provider, ask which report supplies equivalent information. Menu names and reporting capabilities vary.
2. Confirm you are comparing the same activity
Check the business location, merchant account, currency and date range. Keep payments handled by different providers separate until each group reconciles.
Use payments actually collected, rather than estimates, open invoices or the value of work completed. At an auto shop, a repair order and its payment are separate records; confirm which one your report measures.
Also check your report’s time zone and the transfer cutoff. Square notes that payments accepted after its daily cutoff may fall into the following transfer. A calendar-day sales total therefore may not match a single transfer. Square’s transfer-matching guidance.
Check whether your sales report already subtracts refunds before subtracting them again.
3. Explain every adjustment
Read the itemized activity behind the transfer. Look for refunds, fees, disputes, reversals and any reserve entries that apply to your account.
These entries have different meanings. Stripe’s reporting documentation, for example, distinguishes disputes, dispute reversals, failed refunds, fees and reserved funds. Treating all deductions as processing fees can hide the actual reason for a difference. Stripe: Reporting categories.
Use only adjustments documented for the transfer being reviewed. Confirm whether fees are deducted from that payout or billed separately.
Here is a fictional example with no other adjustments:
| Activity allocated to this transfer | Amount |
|---|---|
| Card payments | $5,000 |
| Refunds | -$200 |
| Processing fees deducted | -$125 |
| Disputed payment deducted | -$300 |
| Expected bank deposit | $4,375 |
The $625 difference includes three separate items. Only $125 represents processing fees in this example. These figures are not Platinum pricing or an actual merchant result.
For an unfamiliar adjustment, ask the provider to identify the underlying transaction and explain the entry.
4. Investigate a payment or transfer that is missing
First determine what is missing: a payment from the processor’s records, a payment from a particular payout, or an entire deposit from the bank.
Check that the payment completed and was not simply recorded under cash, check or another tender. Square also notes that offline payments must upload before they can follow the transfer schedule.
For a missing bank deposit, review the transfer status, expected arrival date and destination account. Weekends, bank holidays, incomplete bank verification and account reviews can affect transfers. Square documents these as troubleshooting possibilities; another provider’s requirements and timing may differ. Square: Troubleshoot missing transfers.
If the expected arrival window has passed, contact your processor with the amount, transfer reference and date. Request available trace information for your bank. Keep the issue open until the deposit or another documented resolution is confirmed.
5. Use the report that fits your payout method
An automatic payout report may not work the same way as a manual or instant payout report.
Stripe’s payout reconciliation report links automatic payouts to their underlying activity. Its ordinary manual-payout users are directed to the Balance report, while instant payouts must be reconciled against transaction history. Stripe: Payout reconciliation.
Ask your provider how to reconcile your specific setup. If you leave funds in the processor account, include that remaining balance in your review rather than expecting every collected dollar to appear in the bank immediately. Stripe’s Balance report separately shows starting balance, activity, payouts and ending balance. Stripe: Balance report.
6. Avoid recording the same income twice
If a sale or invoice payment is already recorded in your books, adding its bank deposit as fresh income can duplicate the revenue.
Intuit advises matching downloaded transactions to existing records when those records are already present. Review suggested matches before accepting them, and have your bookkeeper confirm how processing fees and other adjustments should be recorded. Intuit: Prevent duplicate transactions.
Do not create a miscellaneous fee solely to force the books to balance.
7. Make reconciliation a routine
Platinum recommends checking new transfers on business days and keeping one exception list for unresolved differences. Record the reference, amount, explanation still needed, responsible person and next review date.
At month-end, have your bookkeeper reconcile the bank and processor balances, including documented funds still awaiting transfer. Keep supporting reports together so someone else can follow the same trail.
When reviewing a new payment provider, request a demonstration of this process. Ask how your team will trace a deposit, identify adjustments, export records and obtain help when something does not match.
Need help understanding your processing costs and reporting? Request Platinum Payment Processing’s free merchant analysis. Tell us what is difficult to reconcile and what your business needs from its payment setup.
