e-Reconciliation finds its place in every accounting practice, but for some business models it has become a central issue. Transactional industries stand out as the most prominent example, where very large volumes and cash amounts of foreign exchange transactions are typical features of turnover. The retail sector and the e-commerce segment in particular are booming as consumer confidence strengthens. Online retail platforms and a variety of payment and shipping options provide customers with additional incentives that trigger purchase decisions. As a result, e-commerce has futuristically delivered on its promise of instant access to a myriad of affordable consumer goods and a global inclusive market experience. 

 Savvy business owners anticipate customer needs and complement product offerings with attractive collateral services, from seasonal discounts, gift cards, trial periods and free returns to flexible payment options and shipping costs. Competition is fierce and marketing methods push sellers to develop complex distribution networks. This is a challenging undertaking involving more and more partners. 

e-Reconciliation General Challenges 

From the merchants’ perspective, the increasing complexity of the retail ecosystem forces strong internal accounting controls to stay on top of cash flows, as the majority of transactions take place in a digital environment. The delivery of a single online order requires the authorization and/or action of at least four parties besides the customer and the merchant itself, as well as their bank, payment processor/credit card issuer, parcel delivery company. 

Attributed transactions may be multiplied by two in case of cancellations, refund requests or supply chain disruptions. Some of the intermediaries are subject to fees for their services, which reflect the total amount and must be properly distinguished/segregated. Note that cross-border trade also means currency conversions and underlying forex differences, as well as customs duties and tariffs levied in some cases. 

Judging from our experience with Melasoft e-Reconciliation customers, even small and medium-sized e-commerce sellers deal with several thousand transactions per day. For global market leaders, for example, the numbers increase by millions and there are sharp changes in consumer activity, for example, around holiday campaigns. In these volumes, the increased daily data inputs cannot be handled manually in a timely and accurate manner. Monitoring frequent transaction status updates and cleaning them up one by one is a hopeless endeavor. 

Legacy tools used in day-to-day reconciliation tasks (MS Excel, overwhelmingly) provide little room to grow the business. Beyond a certain threshold, regularly exceeded by retailers, transactional matching in spreadsheets is almost impossible. When comparing quantity totals, important details fall through the cracks and the root cause of the mismatch (which can range from time delays to fraud attempts) is not properly investigated. So falling behind in Reconciliation can have a detrimental impact on both client satisfaction and financial health. 

How do we help our clients? 

Melasoft e-Reconciliation has extensive experience in implementing reconciliation solution for small and large e-commerce clients. Some of them are also increasing sales through proprietary or third-party physical locations, which is an additional dimension. In general, the most typical case is three-way reconciliation between payment processors (PayPal, AMEX, Barclays, Chase Paymentech, Adyen, Beanstream, Worldpay and Skrill), banks and internal ERP systems, which is performed in two steps (processor-bank and processor-internal system). 

Data is automatically sourced and loaded through predefined import templates in the Melasoft e-Reconciliation environment. The configurable scheduling engine allows grouping reconciliation tasks into batches. Salient items generated as a result of matching iterations can be efficiently searched down to the transaction level by fewer users. Configurable cross-sections of batch amounts display and arbitrate exchange rate differences and acquirer fees (payment processor generated) at both cash and transaction levels. 

In Melasoft e-Reconciliation, instead of being scattered across numerous documents and repositories of questionable compliance value, individual user accounts occur in a single database with simple browser access and detailed audit trail. The output of reconciliation reports (cashbooks, account balance variances, collections, outstanding items, etc.) feeds the Core ERP solution. 

Our e-commerce customers have automated and streamlined the reconciliation process. They benefit from Melasoft e-Reconciliation without negatively impacting their daily business. Users quickly adapted to the intuitive interface during training. Dedicated Melasoft e-Reconciliation experts worked with our e-Commerce Clients to configure the system during the implementation phase and provide post-implementation support. Once our Clients have a full command of the system, they proactively undertake new processes on their own. Benefits – increased trust, confidence and visibility. 

It is important to emphasize that what we learn at Melasoft is continuously invested in our solution upgrade efforts so that all our clients can benefit from them. We evolve as our customers evolve and we eagerly learn from each other. Please feel free to contact us with any questions you may have!