As retailers expand into mid-market and beyond, the manual reconciliation of payments becomes increasingly complex and costly. With hundreds of thousands of transactions daily, relying on spreadsheets for reconciliation delays insights into the previous month and raises questions about data accuracy and acceptability.
The sheer volume of transactions, coupled with a multitude of value-added service (VAS) plugins, introduces layers of complexity and the potential for costly human errors. Automation emerges as the most viable solution to reconcile at scale and ensure accuracy.
Automated payments reconciliation offers transformative benefits for retailers:
1. Cost Savings: Previously handled by large teams, automation reduces the need for manpower, allowing businesses to reallocate resources to more value-added tasks. One business saw its reconciliation team shrink from over 100 to just 12, with the rest redirected to roles enhancing business value.
2. Immediacy and Speed: Technology’s hallmark trait of accelerating processes applies here too. Automated reconciliation provides a single, accurate view of transactions the next morning, empowering quicker decision-making and problem resolution.
3. Accuracy: Automation eliminates human error, providing assurance that the data reflects the truth. This eradicates the typical 1 to 3% margin of error associated with manual reconciliation.
4. Automating Fees and Commissions: The complexity of transaction types and tender methods necessitates sophisticated automation. From various payment methods to intricate VAS scenarios, automation ensures accurate reconciliation and facilitates seamless settlement instructions with banks.
5. The Automated Future: The era of spreadsheets is fading. Automated reconciliation not only expedites problem-solving in complex ecosystems but also ensures data integrity, crucial for informed decision-making in today’s competitive landscape.
In this fast-paced environment, retailers must weigh the costs of manual processes against the tangible benefits of investing in automation software. With robust data governance and compliance measures in place, automated reconciliation emerges as a strategic imperative for retailers aiming to thrive in an increasingly digitized marketplace.
By Graham Bradford, Senior Product Manager at Ecentric.