Reconciliation is the process of confirming that the balance in the Accounting books matches the balance in the Statement (gateway statement, bank statement, etc).
Reconciliation helps your accounting team confirm that all the amounts appearing in the statement are brought to record into the books of accounts and a clear explanation emerges for the unreconciled items.
You have a number of invoices processed on a daily basis. The payments are initiated from Chargebee and processed by your gateway. The gateway transfers the final amount (as a lump sum) at the end of the day or after a few days depending on the gateway, with no correlation to the original invoices for which payments are processed. The problem statement is as follows:
How do you reconcile the invoices/transactions with the bank statement when one lump sum amount is deposited in the bank account (when you do not know which individual invoices make up the lump sum amount)?
| Bank Transaction | Invoices/Transactions |
|---|---|
| Sum of $490 credited to the Bank Account on 4th Jan |
Customer 1 - Invoice 001 - $99 (Paid on 2nd Jan) |
| Customer 2 - Invoice 002 - $99 (Paid on 2nd Jan) |
|
| Customer 3 - Invoice 003 - $99 (Paid on 2nd Jan) |
|
| Customer 4 - Invoice 004 - $99 (Paid on 2nd Jan) |
|
| Customer 5 - Invoice 005 - $99 (Paid on 2nd Jan) |
|
Stripe cannot be connected to QuickBooks to download the statement (as you can do with your bank accounts).
The reconciliation process can be simplified by following the steps mentioned below [this is a recommendation from Chargebee and may vary based on different accounting practices]:
In the same example above, an account is created in QuickBooks and the gateway statement is uploaded.
| Invoices/Transactions | Gateway Statement | Bank Transactions |
|---|---|---|
| Customer 1 - Invoice 001 - $99 (Paid on 2nd Jan) | Transaction processed, for $99 | |
| Customer 2 - Invoice 002 - $99 (Paid on 2nd Jan) | Transaction processed, for $99 | |
| Customer 3 - Invoice 003 - $99 (Paid on 2nd Jan) | Transaction processed, for $99 | |
| Customer 4 - Invoice 004 - $99 (Paid on 2nd Jan) | Transaction processed, for $99 | |
| Customer 5 - Invoice 005 - $99 (Paid on 2nd Jan) | Transaction processed, for $99 | |
| Processing Fee $5.00 |
||
| Transfer $490 to Bank account on 4th Jan |
||
| Sum of $490 credited to the account on 4th Jan |
||
The gateway processing fees will be aggregated and shown in the gateway statement export if the multiple fee line items were applied in your gateway statement.
If you have not enabled reconciliation during initial configuration, you can begin the setup and select a clearing account.
Connect your Chargebee and QuickBooks accounts. Click Apps > Go to Marketplace > Accounting > QuickBooks > Reconciliation to navigate to the QuickBooks integration sync settings page.
Click Generate New Statement under the Reconciliation tab. The Reconciliation tab displays up to five recently generated gateway statements. You can also view the generated time and the date range of these statements.
In the Generate Gateway Statement pop-up, select a gateway account for which you want to download the statement.
Select the date range for which the statement should be downloaded. You can choose to download from Last reconciliation till current date or select start and end date, as required.
You can optionally select Include pending transactions for charges, payments and refunds that are in in-progress status to be included in the reconciliation statement.
Similarly, select Include unsettled payouts to include settlements and bank transfers that are in in-progress status to be included in the reconciliation statement.
Click Generate to generate a new gateway statement for the selected date range. Once the statement is generated, you can download the statement and upload it to your QuickBooks account.
If you have an existing gateway account in QuickBooks to manage the gateway statement, you can use that, or you can create a new bank chart of account and import the Gateway statement.
Chargebee's plugin is compatible with the current reconciliation logic and User Interface (UI) of QuickBooks. Any further updates on the QuickBooks reconciliation logic or UI will not be supported automatically by the plugin and might disrupt the reconciliation process.
After the Payments and refunds are reconciled, the settlement entries should be reconciled. You need to transfer the lump sum amount from the Gateway account to an actual Bank Account.
Now run the Reconciliation process for the Bank Account as well. Reconciliation is now complete and all entries are processed.
1. Will the gateway statement be converted into QuickBooks format?
When you download the statement from Chargebee, Chargebee will convert it to a format accepted by QuickBooks, so you do not have to convert the files again.
2. How are multi-currency invoices managed?
For multi-currency users, the exchange rate will be derived from the Gateway involved.
3. Why should I enable Include pending transactions and Include unsettled payouts?
Payment transactions and payment gateway payouts between your bank and gateway accounts do not happen in real-time. Let's say you are using the Stripe payment gateway for payment processing and you have a few transactions initiated via Stripe for the last week of May. You might actually see these amounts credited in your bank account only in the first week of June, until when they are marked "in progress" in your gateway statement. Similarly, Stripe payouts towards your bank account that includes settlements might take a while to be processed and does not happen in real time with every transaction.
Some businesses may find this sort of time lag difficult because, it could come in the way of the reconciliation process. To address this time lag and to help you with successful reconciliation during any given period of time, you can enable Include pending transactions and Include unsettled payouts. This will help reconcile all amounts successfully, even those that are in pending status.