Digital solutions not only make payments faster and more seamless, they also help you solve problems in new ways. Tech-based innovations are changing the way payments are done, improving efficiency and productivity to a great extent.
Payment reconciliation is one such area that is crucial for every business. Yet it tends to receive little attention and investment. Many businesses still rely on basic, manual methods of reconciliation. However, as a business scales and costs become more diverse, the reconciliation process also becomes more complex. Manually reconciling payments is slow, costly, and prone to error. That’s why it is one area that needs more than a cursory approach.
So, what is payment reconciliation, and how do you gain by automating this process end-to-end?
What Is Payment Reconciliation?
To keep your business successfully running, it is vital to make sure that everything adds up when it comes to finances. And this is what payment reconciliation does. It ensures your bank records match your internal account statements. It requires you to go through all the data on costs and sales to ensure that everything is up-to-date and correct. Thus, it helps reduce the overall financial risk to your business.
Why Automated Payment Reconciliation?
Because it helps you:
- find any mismatch in account details, fraud, or unauthorized payments
- avoid unpaid or late invoices
- avoid extra charges in the form of fees, like an overdraft fee
- understand patterns in your company’s spending and cash flow
- gain accurate payment insights and real-time results
Benefits of Automated Payment Reconciliation
Automated payment reconciliation improves your overall decision making because you have better insights on your finances. Here are a few main benefits:
1. Reduced Costs
Automation helps you cut down costs related to manual labour. Timely alerts help to avoid late or missed payments. This helps you to cut down or avoid expenses like bank penalties, regulatory and tax charges, cross-border fees, etc.
2. Accuracy + Improved Cash Flow
Manual processes are more prone to errors. Plus, identifying and correcting these errors is consumes a lot of time. Incorrect data hampers good decision-making. Automated reconciliation increases the accuracy of data, making it easier to co-relate and process these insights. Thus, you have better visibility of your cash flow across your business functions.
3. More Strategic View of Payments
Meaningful data is at the core of business intelligence. When you automate, you optimize your reconciliation process. Thus, more granular financial data is available to you. You can use this data to understand payment trends, customer preferences, risk factors, etc. to take more strategic decisions.
4. Better Fraud Detection
Automated payment reconciliation gives you end-to-end visibility of payments data. This improves fraud detection. Because you have access to granular data on customer behaviour and payment preferences, it becomes easier to analyze patterns and spot any suspicious activity. You can take preventive action on time, and protect yourself and your customers.
Automating the payment reconciliation process streamlines your business and helps you achieve major gains. It unlocks access to insightful data, and ensures your business runs smoothly and efficiently. Since data helps you understand your customers better, you can offer them better services, thus boosting the customer and brand experience.
How can Novalnet Help?
If you are looking to automate your payment reconciliation, we can help you. We are a global PSP who are trusted advisors to Europe’s leading brands when it comes to payments. Our state-of-the-art technologies and methods help businesses in Europe accept payments globally. From our instant payment plug-ins to our AI-based risk management tools, we have the resources to get you up and running with your payments in a short time, and with zero hassle.
Reach out to us today to know more.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.