Let's look at some of the best practices for the payment reconciliation process that businesses can use to make the process easy and efficient.

1) Process Standardization

Periodic weekly, monthly, or quarterly reconciliation for all companies. The payment reconciliation process involves the same series of steps every time and can be grouped into five main groups:

• Data Extraction
• Compilation
• reception
• Conformity
• Reconciliation. 

Standardizing these steps is essential for a finance team or an accountant to ensure accuracy, inconsistency, and error avoidance.

You can achieve standardization by documenting these steps throughout the reconciliation process and implementing templates that new or existing finance team members can easily follow. However, these step flows and registered templates should be reviewed periodically to update gaps and look for opportunities to automate steps.

2) Establishing Internal Control

Concerning the e-commerce payment reconciliation process, it is essential to include a set of internal controls that can identify and highlight potential issues such as material errors. These internal controls are specific to the nature of the business and can be incorporated into standard standardized processes.

These internal controls reduce risk, ensure business integrity, and are critical to consistent and error-free financial reporting. It is essential to inform each new team member about these checks. Accountants at many e-commerce retailers train their e-commerce account managers or sales teams on these controls. 

3) Use of Automation

After standardizing the entire process, companies need to improve their F&A teams by implementing financial redesign and automating the reconciliation process to give them the time and focus on performing reconciliations across many complex transactions accurately.

Many digitally leading companies automate standardized processes by collecting real-time data from internal and external sources, compiling the data, and then creating triggered workflows to identify discrepancies. 

Automatic payment reconciliation saves companies time and makes the process simple and error-free. Because workflows are based on triggers and conditions, they can be updated as business needs change, new technologies, sales channels, and more. These terms inevitably change upon introduction. Therefore, as with process standardization, automated workflows must be reviewed and updated periodically.

4) Analysis of Key Performance Indicators

Payment reconciliation errors can lead to discrepancies in bank statements and expose your business to financial risk. That's why most e-commerce merchants and D2C brands focus on making the process as efficient and error-free as possible.

However, it can only be effective if the payment reconciliation process, whether automated or manual, is regularly reviewed to investigate gaps in the process or identify opportunities for improvement. Here are some key metrics that merchants and e-commerce managers can monitor closely:

• Average time to complete the comparison process
• Comparison quality (number of first comparisons)
• The number of discrepancies identified in each comparison

After establishing a benchmark, you can repeat the process until you get the best results. This analysis is essential because it provides complete visibility and enables improvements. 

5) Integrated Solution

Data analysis is the most challenging part of the tuning process, and many errors occur only at this stage. Most of the F&A team's efforts are spent collecting, cleaning, and uploading data rather than analyzing the results and ensuring that the financial statements are error-free. However, there is an easy way.

Market service providers can offer solutions that facilitate the payment reconciliation process. These services can be purchased from ERP systems or directly from Flipkart, Amazon, Myntra, etc. It includes technology solutions that can automatically import and compile transactional data from markets, such as:

In addition to data import and reconciliation, these solutions offer features such as multi-step transaction reporting, reconciliation workflows, and process analysis. These solutions ease the burden of your F&A department by accessing detailed, automated, and up-to-date reports on costs and revenues in real-time. Some programs can generate accurate, simple, and detailed descriptions in minutes. Data is also updated in real-time from direct sources, making the reconciliation of sales and payments simple, efficient, and seamless.

E-commerce merchants and D2C brands need to define software solutions. Users should use pre-built ERP APIs that connect these solutions to ERP systems and marketplaces.

6) Training the Team

We have discussed some practices that make the salary adjustment process effective, but it can only work if the company trains and trains its employees to be successful in these practices. Businesses today understand that digital transformation is achieved by adopting a technology platform and transforming the workforce. This is why e-commerce merchants and D2C brands undertake internal and reskilling initiatives. In particular, F&A team members must be trained to implement these automation and integration solutions and continuously evaluate their performance.

Conclusion

Comparing salaries is tedious, but it's a necessary task for any business, and it becomes even more difficult for companies that sell products on multiple platforms. However, the six practices above can help finance, and accounting teams adjust effectively and efficiently.

An optimized payment reconciliation process helps companies avoid overdrafts, pay uncertain market fees, reduce risks, prepare financial statements consistently, and analyze economic trends of cash inflows and outflows.