Understanding Payment Processing and Merchant Accounts

Flow of Funds

When performing a reconciliation, it is important to understand the flow of funds, beginning with the amount you charge for a registration. In the illustration below, assume that you deploy a registration with a charge of $100 per registration and that you receive 20 registration submissions. The fee amounts are for illustration purposes only and do not necessarily reflect actual payment processing fees.

Important concepts

Your merchant account is the where all online payment activity takes place, making it the source of truth for payment processing. Registration payments are received, refunds are issued, and payment processing fees are incurred in the merchant account. Therefore, an accurate accounting will focus first on online registration charges and the payments received for those charges in the merchant account.

Once payments have been received in the merchant account and payment processing fees have been deducted, the remainder, or net receipts, are available to be disbursed to your bank account. Each day, that day's cumulative receipts are transferred as a single disbursement to be deposited in your bank account. If you are running multiple registrations at the same time, the receipts from all registrations may be included in a single deposit. 

The best and most accurate approach to reconciliation is:

• First confirm registration submissions received in Doodlio and the amount you charged for those submissions.
• Next confirm online payments for those registration charges in the merchant account
• Finally, confirm that all merchant account receipts have been transferred to your bank account

This approach will allow you to verify that all registration payments have been received and deposited in your bank account, while at the same time helping you understand any other expenses that may impact your net receipts.

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Tag Descriptors

• Applies to roles: League Director, Athletic Director, Business Manager
• Topics: Payment Processing
• Scenarios: How Payment Processing Works