Don’t Let Revenue Slip Through the Cracks: Why You Should Reconcile Merchant Deposits Every Month
If you run a drag-racing shop, sponsor events, sell parts online, or just own any business taking merchant payments, here’s something that might keep you up at night: unreconciled merchant deposits. Missed revenue, unnoticed fees, delays, or outright mistakes can cost you thousands if you’re not checking your statements carefully. Monthly reconciliation of merchant deposit statements isn’t just bookkeeping busywork—it’s protection.
Watch this short video:
What is Merchant Deposit Reconciliation?
Merchant deposit reconciliation means comparing what your merchant processor says it deposited (net of fees, refunds, chargebacks, etc.) against what your own sales records or POS system say should have been deposited, and what actually shows up in your bank account. It’s making sure everything lines up. It’s part of payment reconciliation.
Why Monthly Reconciliation Matters
Here are several big reasons monthly reconciliation is essential:
Catch Missing Funds Early
Errors happen—processors sometimes apportion deposits incorrectly, forget refunds, or mis-charge fees. A business we work with lost about $10,000 simply because these statements weren’t reconciled until later. By then, tracing the missing amounts got harder.Maintain Accurate Cash Flow & Forecasting
If your bank deposits don’t match your sales records, your cash flow projections will be wrong. That can lead to over-spending, unplanned borrowing, or being caught off guard at tax time. Regular reconciliation ensures you know exactly what money is in the pipeline.Reduce Risk of Fraud, Errors & Unauthorized Charges
Fraud, duplicate charges, or unauthorized refunds are easier to detect when you compare monthly statements. If something looks off, you can investigate before it becomes a bigger issue.Save Time & Reduce Stress During Tax Season
Clean, reconciled books mean your CPA or tax preparer can work efficiently. No last-minute scrambles to find missing batches, track down fees, or sort out discrepancies. It also means fewer audit risks.Ensure Regulatory & Compliance Accuracy
For many small business owners, accurate financial reporting is required for tax filings, audits, or even contracts with suppliers or sponsors. Valid statements and reconciliation show you’ve got your books in order.
Common Causes of Discrepancies
When things don’t match, typical culprits are:
Processing fees not anticipated or mis-categorized
Refunds or chargebacks that weren’t subtracted in the right period
Settlement timing differences (sales at end of month might deposit next month)
POS or gateway reporting errors
Manual data-entry mistakes or missing sales entries in your system
Best Practices for Monthly Reconciliation
To make this work smoothly, here are some best practices:
Pull together all relevant data: your POS/sales platform reports, merchant processor settlement reports, and bank deposit statements.
Use consistent identifiers (dates, batch numbers, transaction IDs) so you can trace deposits back.
Flag fees, refunds, and chargebacks and verify they are correct.
Document discrepancies: write down what was missing, why, and how or when it was resolved.
Automate or use integrations where possible—POS → processor → accounting software—to reduce manual work. ECS Payments+1
How a Bookkeeper Can Help — And Why It’s Worth Hiring One
Reconciling merchant deposit statements is conceptually simple, but it takes time, careful attention, and consistency. Here’s how hiring a bookkeeper (like us) adds value:
Saves you time and mental load, so you can focus on your core business—whether that’s drag-racing events, custom fabrication, or sales.
Expertise in spotting trends or patterns you might miss (e.g. recurring fee overcharges, payment gateway oddities).
Regular checks means you catch missing funds early—sometimes thousands of dollars.
Better organization for tax season or audits, fewer surprises.
Clear reporting so your CPA gets clean books and can spend less time sorting errors, more time doing strategy.
At A & L Bookkeeping, we offer monthly merchant deposit reconciliation as part of our bookkeeping services. We work through all your reports, find discrepancies, ensure fees are as expected, and help you recover missing amounts so you don’t pay more or wait for slow deposits.
What to Do Now
If you’re not already reconciling monthly, here are your next steps:
Review your last 2-3 months of merchant processor statements vs your POS and bank statements. See if anything is off.
Talk to your bookkeeper (or hire one) and ask them to take on this reconciliation process.
Put into place some structure: schedule it monthly; set reminders; ensure your bookkeeper has access to needed reports.
Consider integrating software and automations to reduce manual work and errors.
Reconciliation of merchant deposit statements every month isn’t just a good practice—it’s a safeguard. You protect revenue, maintain accurate records, reduce surprises at tax time, and give yourself peace of mind. As a small business owner—especially if you’re in drag-racing, events, parts, or any business with lots of sales and processor fees—this can literally be thousands of dollars saved or recovered.
If you'd like help setting this up, auditing your recent merchant deposits, or handing this off so you don’t have to worry, we’d be glad to assist. At A & L Bookkeeping, we love making financial leaks plug up.