Accurate reconciliation of ACH and card transactions is essential for maintaining clear financial records. With BlueTape, each invoice payment includes a processing fee deduction before the net amount is deposited into your bank.
Whether you use ACH or card processing, your transactions for an open invoice will include two sections:
- Fee deducted by BlueTape
- Net amount deposited to your bank account
In addition to your bank record, you can find transactions for an open invoice in:
- Your BlueTape account by clicking on Sales, then on Settlements.
- Your BlueTape monthly settlement report. To access this report, log in to your BlueTape account, click on Sales, then click on Statements. You may then select the desired month and download the report.
Whether this is card processing or ACH processing, you will receive ACH transfers in your bank account. When you see transactions in your bank statement, you should see ACH transactions coming from Aion or Aion BlueTape as reference.
As an example, let's consider there is a $5,000 invoice that your customer paid via ACH. Your transactions for that invoice would be listed as follows:
- Invoice Amount: $5,000.00
- Fee Deducted by BlueTape: $10.00
- Net Amount Deposited to Your Bank: $4,990.00
Sample Bank Transaction: This is a sample of how the ACH transfer from BlueTape may look in your bank account.
Sample Settlement Page for ACH & Card Transaction: This is what your settlement page will look like for a card or ACH payment while in the processing state. This is located under the “Settlement” tab in the left side of the BlueTape console.
Sample Settlement Page for ACH & Card Transaction: Once the transaction has been settled, the Settlement page will update with the new data set. You can use this information to reconcile your accounting, using the transaction ID as a reference point.
Sample Finding the Transaction ID in BlueTape: Locating your transaction ID will assist in account reconciliation, as the transaction ID will be shown in both BlueTape and in your bank account. You can locate the transaction ID on the Transaction page for ACH and Card payments, located under the category “Transaction” tab.
1. Tips & Best Practices
- Set Up a Distinct Expense Account
- Consider creating a dedicated general ledger account for “BlueTape Fees” and “Payment Processing Fees” so you can track these fees separately.
- Automate Where Possible
- Many accounting systems allow you to create rules that automatically categorize and split deposits into net payments and fee expenses once it recognizes the payor (in this case, BlueTape).
- Verify Against Statements
- Each month, compare your accounting records to your BlueTape settlement page or BlueTape’s monthly statements to ensure everything aligns.
- Maintain Documentation
- Store or attach supporting documents (invoices, statements) so you have an audit trail for each transaction.
2. Step-by-Step Account Reconciliation
Step 1: Identify the Payment
- Verify the fees and net amounts deposited to your account on the settlement page of your BlueTape account or in your settlement report.
- Locate the customer payments and net deposits
- In our example above, you will see in your bank statement (or merchant account statement) that $4,990 has been deposited by BlueTape.
- This deposit corresponds to the original $5,000 invoice.
Step 2: Record the Payment in Your Accounting Software
In most accounting systems, you will start by recording payment on the open invoice for $5,000. However, you’ll need to account for the fee in the same step. Here’s how you can structure the journal entry:
- Debit (increase) your bank account for the net amount received:
- Debit: Bank Account >> $4,990
- Debit (increase) an expense account for the processing fee (e.g., “BlueTape Fee”, “ACH Processing Fees” or “Bank Fees”):
- Debit: ACH Processing Fees >> $10
- Credit (decrease) Accounts Receivable for the full invoice amount (which closes out the invoice as fully paid):
- Credit: Accounts Receivable >> $5,000
Result: This entry shows that your customer has effectively paid $5,000, but $10 went to fees, leaving you $4,990 in the bank.
Example Journal Entry: Using the $5,000 invoice example with a $10 fee:
Step 3: Mark the Invoice as Paid
- In your accounting software, link the payment record to the specific customer invoice.
- Mark the invoice as Paid (or Closed) for the full $5,000 amount.
Step 4: Reconcile the Bank Deposit
When you do your bank reconciliation:
- Match the $4,990 deposit in your bank statement to the corresponding journal entry (or payment record) in your accounting software.
- Ensure the difference of $10 is captured as the processing fee and is reflected on your expense ledger.
Handling Multiple Invoices in One Deposit
If a single bank deposit from BlueTape covers multiple invoices, you can still use the same reconciliation method:
- In the Settlement page of your BlueTape account or your statement, find the total transaction amount that sums up all invoice amounts.
- Identify the fee(s) deducted.
- Split the total deposit amount + fee(s) across the relevant invoices, making sure each invoice is correctly marked paid and the total fees are properly expensed.