How to reconcile EFTPOS sales

business.gov.au explains that card payments can be taken online or through a physical EFTPOS terminal. Either way, each card sale leaves a trail in several places:

• Your register or point-of-sale system, which records what was sold and how the customer paid.
• The terminal, which produces a settlement total for each trading day.
• The provider's deposit into your bank account, which may arrive a day or more later.
• The provider's merchant statement, usually monthly, which lists the fees.

The register is your internal record. The settlement and the bank deposit come from outside the business, so they can serve as the external records the ATO's tip suggests checking internally recorded payments against.

Card settlements may reach the bank after the sale, so a clearing account can keep those timing differences apart from the bank account. The usual entries:

• Day's card sales: debit the card takings clearing account and credit sales.
• Refund put back on a customer's card: debit sales refunds and credit the clearing account.
• Provider's deposit: debit the bank and credit the clearing account.
• Fee taken out of a settlement: debit merchant fees and credit the clearing account.
• Fees charged separately, such as a monthly debit: debit merchant fees and credit the bank.

Once everything is recorded, the clearing account's balance should be made up only of settlements the provider hasn't yet paid into the bank.

1. Take the register's card total for the trading day and the terminal's settlement for the same day.
2. Compare them, and note the time the terminal settled and the time the register closed.
3. When the deposit arrives, match it to the settlement or settlements it covers.
4. Investigate any gap while staff still remember the day.

Tuesday's gap is an error in the register: the sale was paid by card but recorded as cash. Record a correction in the books moving the sale from cash to card, with a note, rather than editing the register's report. The same slip will have shown up in Tuesday's cash-up as cash short by the same amount. Wednesday's gap is timing and needs nothing more than a note.

business.gov.au lists service fees from EFTPOS and credit card providers, and per-transaction costs from banks, among the costs of taking payments. Your provider's statement shows how they are charged:

• Taken out of each settlement: the deposit is smaller than the sales it covers. Record the deposit at what arrived and the fee as a cost, so the clearing account clears in full.
• Charged once a month: the deposits match the settlements, and the fee arrives as a single debit to the bank account.

Buy now, pay later sales behave similarly: business.gov.au says the provider settles with the business at the time of purchase, keeping back its fee, so those sales can run through a clearing account of their own.

• The terminal settles at a different time from the register's close, so late sales land in the next day's settlement.
• A sale paid partly by card and partly in cash recorded as all one or the other.
• A card refund processed on the terminal but not entered in the register, or the reverse.
• A declined payment entered in the register as paid, or a payment put through twice on the terminal.
• Card payments taken while the network was down. business.gov.au notes that EFTPOS needs electricity and an internet connection, and that some systems can work offline while others become unavailable. Payments taken offline may reach the provider later than the rest of the day's sales.
• The provider paying different card types, or several days, in separate deposits.
• Cash out given with a card payment: the settlement includes the cash handed over, but the register's card sales don't. The usual entry for the cash out is a debit to the clearing account and a credit to cash on hand, which keeps it out of sales and lets the clearing account clear.
• A disputed card payment taken back by the provider: follow it up with the provider and the customer, and ask your accountant how to record it if it isn't resolved.

How often is up to the business; the ATO's tips mention daily, weekly or monthly. Where most sales are by card, a daily check of the register against the terminal catches keying errors while they are fresh, and the deposits can be matched as they arrive.

Keep the register reports, terminal settlement reports and merchant statements with each period's records. business.gov.au's general keeping period for business records, these included, is 5 years.