A business can make sales through a website, a till, invoices and an online marketplace while receiving money through several payment providers. Connecting those systems to accounting software can reduce copying and make information available sooner. The connection only helps, however, if everyone understands what it sends and how the resulting entries are checked.
In this article
- Map sales, fees and settlement flows
- Agree how each item should be recorded
- Test the connection with sample transactions
- Reconcile sales reports with bank receipts
Begin with the accounting result you need. Do you want individual customer invoices, daily sales summaries, product margins or simply a reliable reconciliation of settlements? Those are different requirements and may need different configurations.
Map the route from sale to bank
Draw up a list of every sales channel and payment method. For each one, identify where the sale first appears, where refunds are recorded, who deducts fees and how the bank receives the settlement.
A payment provider may combine several days of receipts into one payout, subtract fees and withhold a reserve. The payout is not necessarily the value of sales for that day. Recording only the net bank receipt can conceal expenses and distort turnover.
| Information | Why the accounts need it |
|---|---|
| Gross sales and relevant tax breakdown | Establishes the underlying activity before deductions |
| Refunds and credit notes | Explains reductions and preserves the original sale history |
| Processing fees | Separates provider charges from sales receipts |
| Settlement dates and references | Connects provider records to bank receipts |
| Amounts retained or not yet settled | Explains money still held outside the bank |
For marketplaces, establish whether the business is selling directly to customers or operating under a different contractual arrangement. Do not apply an integration designed for one arrangement without checking another.
Decide which system owns each record
Write down the authoritative source for orders, invoices, payments, refunds and customer details. Avoid two systems independently creating accounting entries for the same sale.
For example, if an online shop sends sales invoices to the ledger, the payment integration should normally account for settlement of those sales through the agreed workflow. It should not create another set of sales merely because money has arrived. The precise configuration depends on the software and business model.
Choose a level of detail that allows meaningful checks without overwhelming the ledger. Individual invoices may support customer credit control. Summaries may suit some retail workflows, but need supporting records and appropriate tax treatment. Ask your adviser to confirm the approach before switching on a high-volume import.
Check the digital record requirements
Where Making Tax Digital for VAT applies, connected systems must support the required digital records and digital links. An integration's marketing description does not establish that the whole business workflow meets those requirements.
HMRC's Making Tax Digital for VAT guidance describes the digital record and linking rules, including particular circumstances for recording sales. Map which applications contain the required records and how information moves between them.
Keep the underlying documents as well. HMRC's VAT record-keeping guidance covers invoices, credit notes and other business records. Imported totals should remain traceable to supporting information. Overseas sales, deposits and unusual refunds deserve specific review rather than an automatic default tax code.
Test difficult transactions before the launch
A successful connection message is not an accounting test. Run a controlled sample covering a normal sale, partial refund, cancelled order, fee deduction and settlement crossing a month end. Include foreign currency or reserve movements if they occur in your business.
Compare the source records with the entries created in the accounts. Check dates, amounts, tax codes, customer balances and the destination accounts. Confirm how failed imports are reported, whether retries can create duplicates and what happens when an order is edited after export.
Agree the first import date. If transactions already exist in the ledger, establish how the connector will avoid importing them again. Save the mapping and test results so the configuration can be understood later.
An illustrative settlement reconciliation
Imagine an online retailer has gross customer receipts of £8,000 in a provider's statement. Refunds total £500 and processing fees £200. The provider pays £7,300 into the bank, with no other adjustments in this simplified example.
The accounting check explains the whole movement: receipts less refunds and fees equal the bank payout. Posting £7,300 as the sales figure would lose the distinction between customer activity and processing costs. If the provider instead paid £7,000, the reviewer would investigate the remaining £300 rather than invent another fee. It could represent unsettled funds or a documented reserve.
This example illustrates the reconciliation method; it is not tax advice or an EPOS client case study.
Keep an owner for the connection
Nominate someone to review import failures and reconcile provider balances at an agreed frequency. Keep a separate list of unresolved differences with their age and supporting evidence. A balance growing each month is a reason to investigate, even when bank receipts keep arriving.
Review the setup after changes to sales channels, refund policies, subscription plans or tax treatment. Include access, export options and disconnection arrangements in the plan so that records remain available if the connector is replaced.
EPOS Accountancy can discuss the accounting requirements of your sales and payment workflow through accounting software support. Confirm available integration support, any technical-provider involvement and the reconciliation responsibilities in the agreed scope. Bring sample sales reports and settlement statements to the conversation; pricing explains how to move towards a quote.