Reconciling Credit Card Statements for Your Business

If your business accepts credit cards as a payment option, you’ll need to reconcile credit card statements against the company’s books. Each month, the bank that handles the credit-card sales for your business will send you a statement listing the following:

  • All your company’s transactions for the month.

  • The total amount your company sold through credit-card sales.

  • The total fees charged to your account.

If you find a difference between what the bank reports was sold on credit cards and what the company’s books show regarding credit-card sales, it’s time to play detective and find the reason for the difference.

In most cases, the error involves the charging back of one or more sales because a customer disputes the charge. In this case, the Cash Receipts journal is adjusted to reflect that loss of sale, and the bank statement and company books should match up.

For example, suppose $200 in credit-card sales were disputed. The original entry of the transaction in the books should look like this:

Debit Credit
Sales $200
Cash $200
To reverse disputed credit sales recorded in June.

This entry reduces the total Sales for the month as well as the amount of the Cash account. If the dispute is resolved and the money is later retrieved, the sale is then reentered when the cash is received.

You also record any fees related to credit-card fees in the Cash Disbursements journal. If credit-card fees for the month of June total $200, the entry in the books should look like this:

Debit Credit
Credit-Card Fees $200
Cash $200
To reverse credit-card fees for the month of June.
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