Point of sale (POS) reconciliation involves manually checking your POS sales records with your credit card processing statements and cash on hand to make sure everything tallies. You should conduct POS reconciliations frequently so that any disparities can be identified and fixed immediately. These disparities can include incorrectly entered credit card charges and cash mishandling. The best practice is to engage in POS reconciliation at the end of each day. Leading POS providers include TouchBistro, Shopify, and Square.
POS reconciliation is not always difficult, but it can be mundane as you have to cross-reference a lot of numbers. However, doing so will keep your transaction statements and sales data accurate. Here are the steps for engaging in POS reconciliation.
Gather the Materials Required
The first step is to gather all of the materials you need to engage in cross-referencing. This includes POS sales transactions, credit card batch statements, receipts and logs, cash drawer, and more.
Compare Card Transactions to Statements
To begin, cross-reference your credit card batch statements with your POS’s transaction list for each refund or sale for the data range you want to reconcile. Make a note if they do not line up.
Compare Cash Transactions to Cash on Hand
Next, you can add up all the cash sales for the day. You can compare the total amount with the amount in the registers. Starting each day with a fixed amount of cash in the register will make the reconciling process easier. Once again, make a note if there are any discrepancies.
For this step, you’ll attempt to resolve any discrepancies found. You’ll need to analyze your data and figure out the reasons and solutions for the discrepancies. The more experience you have with POS reconciliation, the easier it will be for you to spot patterns and fix them. Sometimes, inaccurate data could be due to tips in transactions that have to be applied to employees. Some POS systems allow you to adjust transactions and reconcile them so you can maintain accurate records.
Create a Log for Each Reconciliation Session
If you keep a log of all reconciliation sessions and data, it will be much easier for your accountant or bookkeeper to cross-reference. It’ll also be easier for you if you ever need to revisit the data in the future. You should note down the date, the discrepancy, the reason for the discrepancy, and the solution. Include the totals for cash sales and credit card statements to provide an accurate financial picture. If your accounting professional asks for your POS reconciliation logs, you’ll be able to provide them so they can file your taxes properly.
Benefits of POS Reconciliation
Regularly engaging in POS reconciliation is incredibly important for business owners. POS reconciliation will help you to understand your business needs and reduce accounting errors. By keeping your books accurate, it will be easier to file taxes later. You’ll also be able to catch unauthorized transactions and have a better understanding of your business performance. You’ll be able to track inventory and make better business decisions by restocking hot-selling items. POS reconciliation will also show you the top-performing employees and employees who are making mistakes or stealing cash.