Auditing Transactions - By Avi Jorisch

Merchants ask me all the time what is the best way to reduce the fees they pay for credit card acceptance. One of the most powerful but simple ways to reduce your rates is to audit transactions before settlement.

I strongly advise that if errors are discovered after settlement, merchants may end up paying discount rates for a transaction for which they will ultimately not receive funding.  Timely adjustments made before settlement cost nothing. Auditing transactions is the practice of balancing your daily batches with your Point-of-Sale (POS) Property Management System (PMS). Most POS/PMS systems provide a daily totals report (X or Z Out) that will provide a sum of all credit card transactions run through the system. In some cases, they may even provide a list of the individual transactions that are included in that sum. This total should be compared to your credit card totals to ensure that what you are submitting for funding exactly matches what your sales for the day were in your point-of-sale. If for some reason these reports do not balance, you should have sufficient abilities in your credit card solution to find the problem causing you to be out of balance and to correct the problem prior to submitting your batch to the processor for funding.

Last but not least, settle your batches daily!  This will help ensure that you are getting the best rate possible on all of your transactions for each day. Transactions not closing within 24 hours are considered higher risk as there is a greater chance of the cardholder disputing the charge and thus the processing fees are slightly higher.