By David Lund
The dreaded credit card reconciliation need not be such a big deal if we bite-size it. That is what this piece is all about: How and why you should balance your hotel credit cards daily. That is right – every day – and I mean you need to know the cards are balanced to three separate and connected points.
First of all, just to properly date myself and reminisce just a little, I can remember mailing off the backs of the card imprints each day.
I was working at the front desk, and we would separate the imprints by type and run a tape to balance to our front office Micros posting terminal. OMG, can you imagine? Then they went in the mail, and I guess someone downstairs in accounting picked up the amount for that day and then waited for the payment and the bank statement that also arrived in the mail probably two weeks later. Look how far we have come! So to speak.
That manual process was eliminated by the advent of the swiping terminal and today it is usually a handheld or separate device that gathers the card data or it might even be interfaced with your property management system or point of sale system.
This card data you have just collected is compiled with all other similar swipes and at the end of the day they are “batched up” and transmitted to the credit card processors. Then the data is sent to the bank, and in turn back to you as cash (less the commissions) deposited directly to your bank account. All this passing around creates lots of opportunities for errors.
To balance these card transactions, you need to “compartmentalize” the totals at each point of the journey.
The first stop is the PMS or POS depending on which system you are working with. The end-of-day process will have the income auditor balancing the entire revenue, tax and settlements, plus or minus the changes in the ledgers.
Once this is done, make sure the numbers you have on the terminals you are using – those devices and their “daily batch total” – are equal to the penny the same amount as the PMS/POS. They usually do, but not always. If they do not match up stop right there, find out why and correct the errors.
Now you are ready to transmit your batch and there is one more critical step to ensure you balance: make sure the same amount hits your bank account a few days later. When it arrives in your bank account it is going to be less the credit card commission, so you need to recognize this and account for the difference.
In the end, you have a three-way match less the commissions. PMS/POS, then on to the terminal batch value and finally the bank account. It may sound straightforward but there are some common issues that make it almost impossible unless you do this daily. Things like timing – the processors are separate from your bank – and things do not always line up the way they were sent. There can also be cards that are rejected and change backs that get included with the transmission totals, not to mention the commissions that get deducted usually daily – but not always!
Sounds like a headache and you have not even started yet! So, here is the solution and again I can’t stress this enough the first, second and final ingredient in the formula is “daily.” Here is what your spreadsheet should look like:
Click on image to enlarge
Note at the bottom of the sheet there is an area to enter the separate amounts from the PMS, POS, then the golf operation and finally the spa. Most of the time these are all separate batches. Quite often the final payments from the bank are lumped together so having a process where you can identify the amount at each step of the journey is critical.
Some final notes
- Do this daily
- Capture separate totals from each system that has its own termina
- Make sure each card type is correct, e.g., a Visa may be posted as a MasterCard
- Immediately research and code any chargebacks or daily variances
- Capture the correct commission and book it separately
- Follow the transaction thru to the bank account
You will want a separate tab in your spreadsheet for each card type including debit cards.
It may sound daunting and that is because most people do it monthly or maybe weekly.
Do not make this mistake, do it every day. This way you can stay on top of it.
