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How to Match Sales Entry With Adjusted Value in Bank Reconciliation

I need advice.

I cannot reconcile transactions whose value change after bank charges are deducted during payment.

Scenario:

  • Customer buys an item for N34,000 and an invoice and payment entry is created in the value of the item
  • Payment method is POS Terminal. Bank charges 0.25% of the value of the transaction and credits N33,915 into account.

Problem:

When i open bank reconciliation and try to reconcile the bank transaction with the payment entry, i am unable to do so as the figures don’t match. Thus i cannot complete bank reconciliation even though i know that the figures should match.

How do i resolve this?

For card payment never link it to bank. Make a new ledger name something like card sales. Link this to pos profile. Daily make adjustment entries to CR card ledger and DR bank the amount you actually got and balance amount to card fees ledger.

System does not understand the interchange.

@Muzzy thanks for your reply but i don’t quite understand your recommendation. I do not use POS for sales, i meant to say mode of payment is credit/debit card (out here we just say POS Terminal for credit/debit card payments). So i’m a bit lost on how to implement your solution.

Go to Accounts > Mode of Payment> POS

In POS add your company and in Default link it to POS account. If you dont have a POS Default account then make a new one. Dont select it as Bank. You can make it as cash, general etc. and name it as POS Account

Whenever you make payment using POS (not real POS but as the terminology used by you) as mode of Payment this account will be debited.

Example N34,000 for a sale.

When you get your bank statement it will show N33,915 which is 0.25% less than the sales value. Your POS account will show it as N34,000. So then you need to manually make a Journal Entry like this to move the money from POS to Bank excluding 0.25% bank fees. You also need to add 0.25% as cost of doing business through acceptance of credit/debit card.

CR POS Account N34,000
DR Bank N33,915
DR Bank Charges N85

Hope this helps.

1 Like

Wow!

In a real life FMCG retail store that would be a whole lot of Journal Entries!!!

Kind regards,

@wale Yes the solution is impracticable for medium to large FMCG retail stores. I figured there’s no way around that problem for now so i abandoned the thought of reconciling POS Terminal transactions.

If the payment entry is manual - then you can write off 0.25% and apply it to a Bank Credit Card Transaction Charges Expense Account.

Or book credit card sales in a separate sales account - and then every month or quarter apply a 0.25% expense via journal entry - crediting bank account and debiting expense - so your bank balance will tie up to sales.

Does your 3rd party payment processor not issue you a transaction id at payment time, and note that id on their reconciliation statement to you along with the amount in question? You record that id to match payments and prevent ambiguity, no? That gives all concerned prima facie evidence to avoid dispute and refute claims