A large share of online revenue for brands comes from marketplace sales. Most brands list their products on multiple marketplaces to maximize reach and address different customer segments.
Each marketplace has multiple fee types and commission structures. Accurate reconciliation of payments due and payments received is a complex and time-consuming process when there are a large number of orders. Failing to do so can result in a loss of revenue of 3-5%.
The most common areas where revenue loss occurs are:
- Reconciling payments only at an aggregate level and not for each order
- Poor understanding of marketplace fees and commission structures, and multiple reconciliation file formats
- Damaged, returned, and written-off inventory reconciliation
- Poor follow-up on ticket resolution on marketplace seller portals
Most of these issues happen when the process is being run manually and the team is short-staffed. Here are 5 things brands should do to improve revenue reconciliation and add to their topline:
#1 Implement a Payments Reconciliation Tool
A good payment reconciliation tool automates large parts of payment reconciliation. The key features should include out-of-box seller portal integration, configurable fee structures, and reconciliation rules and reporting capabilities.
#2 Document Fees & Commissions Structure for Each Marketplace
Brands should document the different fees and payment structures in detail. They must also create a normalized internal reference format that is visible to the entire team. There should be a defined process to audit and update these regularly as marketplaces update their fees.
#3 Reconciliation Process Design for Tracking and Inventory
Order-level tracking is needed to identify discrepancies and erroneous charges that are missed out in aggregate reconciliation. Unit-level inventory tracking and reconciliation help account for damages, returns and write-offs, and their adjustments in payments.
#4 Focus on Reconciliation Issue Tracking and Resolution
Issue tracking and resolution are critical steps for the success of the reconciliation process. The process should include detailed steps, responsibilities, and a tracking mechanism to track tickets to closure on seller portals. It should also include structured repositories for supporting documents as required.
#5 Managed Services Model for Payment Reconciliation
Payment reconciliation is a resource-intensive process, and brands should get the right partner to run this as a managed service. This helps in scalability, process adherence, and cost optimization.
Brands can see improvement in their reconciliation outcomes by implementing these recommendations. To know more about how to set up a successful payment reconciliation process, please book a meeting with an Iksula reconciliation consultant.
