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Reconciliation challenges are felt directly by your back-office employees, but they also have an indirect impact on your company鈥檚 bottom line, forecasting capabilities, and cash flow. Efficient and effective reconciliation can free up your employees to focus on other needs, reduce fraud, and boost customer satisfaction. 

Fortunately, virtual cards are a smart way to pay and can improve reconciliation. Keep reading to learn more about what good reconciliation looks like and how virtual cards can help. 

What is reconciliation?

Payment reconciliation is the process of verifying financial transactions to align expected payments with actual ones. From an accounts payable or accounting perspective, that means comparing financial statements from with invoices and receipts from payments processed. This is done to ensure accuracy, maintain compliance, and catch potential fraud, among other reasons. 

Reporting reconciliation often comes in a variety of formats, including daily, weekly, and monthly reports, as well as real-time access through APIs, enabling clients to seamlessly integrate data into their accounting systems.

Who is responsible for reconciliation? 

A variety of back-office roles could be responsible for reconciling payments at a company, including: 

• Accounts payable professionals
• Accounting staff
• Controllers
• Treasury staff

What should reconciliation look like? 

With reconciliation, it鈥檚 often how it works and how it should work at your company. When reconciliation is working well: 

• It鈥檚 one-by-one rather than in bulk, so it鈥檚 more scalable for a large volume of payments.
• It鈥檚 automated and integrated with other systems.
• It鈥檚 electronic and collects transaction data upfront.
• Payment statuses are easy to see.
• There are fewer issues requiring extra attention by your staff.
• There鈥檚 less fraud impact because issues are caught more quickly.

After achieving the above, you鈥檒l save time and have a clearer picture of cash flow. 

When you don鈥檛 achieve the above, reconciliation means your accounts payable team, accounting staff, etc., are spending time reconciling paper invoices, or are unclear whether a payment has been accepted in real-time, or are trying to match hundreds of purchases to a single invoice. 

Imagine that you鈥檙e an auto warranty insurance provider. Your customers depend on you when something goes wrong with their car to potentially facilitate payment with a towing company and an auto repair shop. Any delays in issuing payment can delay service, which creates customer dissatisfaction and hurts your business. You don鈥檛 want to be in a situation where your back-office staff is preparing paper invoices, trying to reconcile multiple purchases to the same invoice, or is unable to communicate to a customer when service is authorized as quickly as possible. 

How do virtual cards improve reconciliation? 

Virtual cards stack up well against other payment methods. Programs can be set up to allow for virtual cards to be issued automatically to suppliers to cover individual purchases, which also prevents the need to bulk reconcile multiple purchases to a single invoice, as opposed to using a shared credit card. 

Virtual card purchases are also more transparent. For example, with WEX, there are built-in APIs that allow for real-time notification so you鈥檒l know immediately when purchases are made. In the auto warranty example, you could tell the driver that the tow truck is on its way as soon as you receive the notification of payment being accepted. That鈥檚 an experience you won鈥檛 have with checks and other traditional forms of payment. 

For more insights and updates on corporate payments, check out:

• Your guide to virtual card rebates
• 2025 payment trends
• Is the secret to better cash flow management AI?

Learn more about how 糖心Vlogpayment solutions can be tailored to your business, so you can accelerate and streamline operations while creating lasting growth and success for your organization.

The information in this blog post is for educational purposes only. It is not legal, tax or investment advice. For legal, tax or investment advice, you should consult your own legal counsel, tax, and investment advisers.

Editorial note: This article was originally published on May 23, 2024, and has been updated for this publication.