For the longest time, reconciliation has been a manual process for businesses. The tedious task demands hours of extra work and often drains company resources including time and money. Even in today’s digital world, with new and advanced technological tools, numerous organisations still rely on manual reconciliation of their accounts.
A PWC report states that close to 30 per cent of the finance team’s time is spent on manual reconciliation.
Online businesses heavily invest in solutions to resolve issues pertaining to the buyer experiences but tend to leave out the benefits of applying similar tools to update their internal systems and processes. In cases where businesses have to collect large payments regularly, manually reconciling them is an inefficient process.
Reconciliations are crucial to every organisation and optimising the process can significantly improve the overall efficiency of your business.
Common issues with manual reconciliation
Apart from being time-consuming, manual reconciliation of payments lead to numerous problems that include:
- Prone to errors: When reconciling payments, there is often a possibility of omissions, wrong entries or other inaccuracies that are inevitable human errors. When the mistakes are detected, additional time is spent on correcting them and accordingly re-aligning the data.
- Guesswork: Sometimes due to the lack of information received, there is some degree of guesswork involved in reconciling the customer payments collected. Reconciliation tends to become more complex as the company transactions increase, and the guesswork can lead to larger errors.
- Lack of control: More often than not, the finance teams do not have complete control of records, data and numbers in real-time. There is also a dependency on other departments leading to discrepancies in numbers during manual reconciliation.
- Inefficiency: Obtaining the transaction IDs manually from the customers and matching payments received based on the time, date, and amount is extremely tedious and time-consuming. This can not just affect the finance teams but make the whole organisation slow and incompetent.
How Paytm Payment Gateway can help automate payment reconciliations
Automating customer payment reconciliation can lead to an improved business control and flow. Paytm’s Large Payment Collection does just that to manage your collections with ease, and frees up your company resources for other strategic tasks.
It replaces cheques, demand drafts, and traditional bank transfers (RTGS/NEFT/IMPS) in business collection by allowing Virtual Account Number Bank Transfers. Businesses can leverage this service of collecting payments through four simple steps:
Step 1: The merchant uses the merchant dashboard or Paytm API to generate a Virtual Account Number (VAN)
Step 2: The merchant then goes ahead and allocates these VANs to the customers via email, SMS, or by attaching them to the respective invoices. Customers can then transfer the money in the VAN by using internet banking (NEFT/RTGS/IMPS). Customers can also deposit the payment from a bank
Step 3: Once the money is transferred and received in the VAN, the Paytm Business Dashboard updates to show a successful payment
Step 4: Lastly, Paytm Payment Gateway settles the money to the merchant on either a real-time basis or through the standard T+1 settlement period
Large Payment Collection can also be used to request money from customers through Paytm Payment Links.
Why choose Paytm Large Payment Collection
Here are the primary benefits of using Large Payment Collection for reconciliations.
- Create custom virtual accounts for all your customers:NEFT, RTGS, or IMPS payments made by customers are easy to track using VANs, Paytm Order IDs, or Unique Transaction Reference Numbers (UTR). You can assign unique and branded VAN’s for your customers
- Track payments & their purpose:Merchants can easily track the purpose of the customer payments through the Paytm order ID or VAN
- Automate bank transfer reconciliation & tally like a pro: Large Payment Collection eliminates the need for manual UTR-based reconciliations, hence the cost involved in manually handling the cheques and demand drafts is also eliminated
- Manage cash flows for your business with quick settlements:Large Payment Collection offers you a flexible settlement (real-time, batch settlement, T+1, etc) based on your business’s requirements
Additionally, you can set up dedicated custom VANs for your repeat customers. The accounts can also be created and deactivated in real-time. Merchants can be 100% sure that money can’t be transferred to a disabled virtual account.
VANs can be shared to collect one-time payments, recurring payments and even crowdfund your campaigns and social initiatives.
Types of organisations and businesses that can benefit from Large Payment Collection
Lenders: Collection of loan repayment from consumers and businesses is easier and simplified with Large Payment Collection. The payments are updated automatically and so do not require tracking each of them manually. Also, lenders can receive their payments on the same day with quick settlements.
Schools/colleges: With Large Payment Collection educational institutes can assign a unique virtual id to each student based on their roll number and bank name, which are also easy to remember. The fees received can be instantly and automatically reconciled on receipt.
Distributors: Large Payment Collection can be utilised by distributors to reconcile the daily inbound bank transfers received from their customers. Since the transaction reconciliations are instant, it ensures that retailers never run out of cash to be further able to invest in inventory.
Collecting and reconciling all kinds of bank transfers is simplified and quick with Paytm Large Payment Collection.
