Tips to relieve the headache of credit card reconciliation

“I understand your pain.”

That’s how Vicki Richardson began her presentation at the Sage Transform conference 2022 in Orlando. She spoke about how to soothe the “trauma” of reconciling the many transactions made on company credit cards carried by employees.

Richardson, manager at Baker Tilly, spent more than a decade as the chief financial officer of a large not-for-profit in California, where she kept track of the use of one corporate credit card by more than 100 employees.

At the conference, Richardson demonstrated reconciliation and payment tricks using Sage Intacct accounting software.

Proper preparation is key to success

To avoid the familiar dilemma of “garbage in, garbage out,” Richardson said, proper setup is key. As a first step, create one liability account in the general ledger for each brand of credit card – Amex, Mastercard, Discover, VISA – that employees use.

All those transactions remain in the appropriate general ledger liability accounts until the user creates a charge payoff. Richardson likened the liability accounts to “buckets” that hold the credit card transactions. They appear on the balance sheet in the credit card liability account, not in accounts payable. Richardson noted that once the user associates a general ledger liability account with the appropriate credit card, the field “greys out” and cannot change.

Next, create a vendor listing in accounts payable, with one entry for each type of credit card, and associate the vendor listing with the credit card, Richardson said.

Now it’s time to upload the credit card transactions into Sage Intacct, using one of these three techniques:

1. Through the user interface, a completely manual exercise that Richardson discourages;
2. Through a bank feed with auto-matching, a process Richardson recommends;
3. Through a third-party vendor

Once the credit card transactions are in the system, and with the credit card statement in hand, it’s time to “grab the bull by the horns,” and reconcile, Richardson said, though she reminded her audience that reconciling the charges and paying the bill are distinctly separate activities.