Credit card reconciliation is a critical part of business operations, but it can be time-consuming and challenging at times. Thankfully, there are steps you can take to simplify the process.
In this article, we’ll discuss the key steps that can make your credit card reconciliation better, as well as tools that can help your business automate and streamline this important activity.
Key Takeaways
- Takeaway #1: Credit card reconciliation is the process of verifying the accuracy of your company’s financial records by comparing transactions on a credit card statement to those recorded in the accounting records.
- Takeaway #2: Credit card reconciliation is essential for good recordkeeping because it helps prevent fraud, provides a clear picture of cash flow, simplifies tax preparation and reporting, and keeps your accounting running smoothly.
- Takeaway #3: Important credit card reconciliation steps are: setting up a system to track transactions, gathering necessary documents, matching transactions, identifying discrepancies, resolving discrepancies, and reconciling the account.
- Takeaway #4: You can streamline and simplify the reconciliation process by integrating your spending activities into your accounting software, reconciling regularly, and maintaining detailed records for future reference.
Why Is Credit Card Reconciliation Essential?
Fraud Detection
Examining your credit card transactions every month (or more often if necessary) can help you identify fraudulent transactions and minimize financial losses for your business.
Financial Control
Regular and repeated credit card reconciliation provides a clear picture of your business’s cash flow and can help you make more informed decisions about your business.
Tax Prep
Reconciling all credit card records is vital for tax prep and provides documented evidence of your transactions should the IRS come calling.
Dispute Resolution
If you have to dispute a transaction — or if a customer disputes a transaction — an accurate reconciliation can help you identify the source of the dispute and provide evidence one way or the other.
Efficiency
Regular credit card reconciliation can help you streamline your accounting and recordkeeping activities so that the entire process runs smoothly and efficiently.
Key Steps To Credit Card Reconciliation
1) Set Up A System To Track Credit Card Transactions
Many small businesses still rely on a manual reconciliation process, where transactions are manually entered into the accounting system at the end of the month. While this method allows for careful review, it’s time-consuming and leaves room for human error, especially when you’re juggling dozens or even hundreds of transactions.
Consider using modern expense management tools to take much of that burden off your plate. These systems automatically import your credit card transactions, help categorize and code them based on rules you define, and sync them directly with your accounting software.
Not only does this save hours of manual work, it also improves accuracy and gives your team more time to focus on higher-value tasks — like spotting anomalies or optimizing spend.
2) Gather Necessary Documents
Gather all applicable documents, including:
- Credit card statements
- Sales receipts
- Invoices
- Accounting software reports
- Point-of-sale (POS) data (if applicable)
- Bills of lading
Keep in mind that this isn’t an exhaustive list and you may need other documents as well.
3) Match Transactions
In some cases, the transactions listed on your credit card statement may already be listed in your accounting system. In other cases, you may be missing a transaction or two. This often happens when an employee forgets to turn in their receipts.
That’s why it’s so important to go through your credit card statement and record any transactions listed there that aren’t already in your accounts ledger.
There may be multiple purchases from the same company in fairly close proximity (i.e., day and time), so be sure to match each transaction based on date, amount, and description.
4) Identify Discrepancies
As you go through your credit card statement, be on the lookout for common discrepancies, including:
- Missing transactions on the credit card statement
- Missing transactions in your account ledger
- Incorrect dollar amounts
- Duplicate transactions
- Unauthorized transactions
- Processing fees
- Chargebacks
5) Resolve Discrepancies
If you discover any discrepancies, investigate them right away. Waiting even a few days can lead to fines and other avoidable expenses that can put a dent in your bottom line.
Contact the credit card processor or your bank to resolve the issues you do find, and be sure to document everything in the process of your investigation.
6) Reconcile The Account
Once your credit card statement and your accounting ledger match and you’ve resolved any discrepancies, ensure that the ending balance in your records matches the ending balance on your credit card statement.
If everything looks good, you’re finished with the reconciliation process.
The final step is to save all documents related to the reconciliation in your filing system in case you need to refer to them later.
Credit Card Reconciliation Best Practices
Integrate Credit Card And Accounting Software
Integrating your credit card software with your accounting software is a great way to reduce manual data entry, eliminate errors, and streamline the reconciliation process.
Submit Receipts Digitally
Instead of relying on paper receipts, ask your employees to scan or take pictures of any receipts they obtain and submit them to you via any approved method (e.g., text or email).
Submitting receipts digitally — whether via text, email, or photo — helps streamline bookkeeping, reconciliation, and long-term storage, making it less likely that one of your credit card users will lose or forget to submit a receipt.
Automate Receipt Submission Reminders
Modern expense solutions like Coast can remind credit card users to add a receipt to the transaction so that managers and other accounting employees don’t have to spend time and effort following up.
Reconcile Regularly
Depending on the volume of transactions, you may need to reconcile credit card transactions monthly, weekly, or even daily.
Maintain Detailed Records
Maintain records of all credit card transactions, including receipts, invoices, and statements.
Keep those records for at least one year — up to three years if you think you might get audited — and use a consistent filing system to make records easier to find.
Accurate Credit Card Reconciliation With Coast
For fleet-based businesses in the trades and transportation industries, credit card reconciliation can be especially challenging. You’re not just tracking office expenses — you’re managing field purchases, fuel spend, and transactions made by employees on the move. Coast is designed to make that process easier and more accurate, without adding more work for your team.
With Coast, reconciliation isn’t a monthly headache — it’s built into the way your team spends:
- Real-time transaction tracking: Every transaction is logged as it happens, giving your finance team immediate visibility into who spent what, where, and why.
- Smart receipt capture: Employees upload receipts at the point of purchase with a quick photo, so you’re not chasing paperwork at month-end.
- Custom spend controls: Enforce expense policies automatically through card-level rules that limit where and how employees can spend.
- Accounting system integrations: Coast syncs seamlessly with tools like QuickBooks Online, letting you review, categorize, and export transactions with just a few clicks — no spreadsheets or manual data entry needed.
- Job code tagging and notes: Add context to every transaction so you can reconcile faster and keep project-level budgets accurate.
Whether you’re looking to eliminate manual data entry, cut down on reconciliation errors, or simply give your finance team better tools, Coast helps you close the books faster — and with more confidence.
To learn more about how Coast can help your company, visit CoastPay.com today.
Frequently Asked Questions
How often should businesses reconcile their credit card statements?
Reviewing transactions at least once a month helps you keep better control of your spending, identify fraud or theft as soon as possible, and maintain an efficient accounting process.
If your business has multiple credit cards, you may have to wait until you have all the statements in hand to conduct your reconciliation, so that may delay things for a while — but the goal is still to reconcile every thirty days or so.
For businesses with a high volume of credit card transactions, it may be more efficient to reconcile the account weekly or every two weeks in order to stay ahead of the curve.
How long does credit card reconciliation typically take for a small business?
Reconciling a business credit card statement can take anywhere from one to two hours if performed every month.
This, of course, depends on a variety of variables, including:
- The total number of transactions
- The complexity of the transactions
- The number of cards in use from a single provider
- The number of different credit card providers you use
- The frequency with which you run a reconciliation
For example, if your transaction volume is fairly low and you reconcile every two weeks, it may only take you 30 minutes to get through all the purchases.
If, on the other hand, you’ve got multiple cards (from a single provider) in the field and those cards are being used multiple times every day, it’s going to take you longer to sort through all the transactions whether you do it once a week or once a month.
Are there specific accounting standards I need to follow for credit card reconciliation?
For businesses of all types and sizes, it’s best to follow the Generally Accepted Accounting Principles (GAAP) and/or the International Financial Reporting Standards (IFRS) when managing accounting records.
Both the GAAP and the IFRS do have suggestions for conducting credit card reconciliations, but it’s the business’s choice whether to abide by one, both, or neither of the guidelines.
