How it runs for franchise owners
A LedgerBPO accountant runs our ReconBot workflow per unit: import the processor's payout report, match it to the deposit, post fees and disputes as separate lines, and log every exception with a cause so sales, fees and cash all tie out.
What is payment processor reconciliation?
Payment processor reconciliation is the work of proving that the money a processor or marketplace deposits equals your gross sales less its fees, refunds, chargebacks, reserves and adjustments for the same settlement period. Each payout is broken into its parts and posted so revenue, fees and sales tax are correct and the bank deposit matches to the cent.
What we handle for franchise owners
- Payout reports from Stripe, Square, Toast or Clover matched to deposits per unit
- Interchange, monthly fees, chargebacks and reserves posted on their own lines
- Gross sales retained for royalty reporting while net deposits reconcile
- Delivery-platform commissions and adjustments tied to order reports
- Exception log in ReconBot with owner and resolution date for each item
The KPI that matters here
Every processor payout matched to a deposit within 2 business days of arrival.
Franchises compliance notes
Franchisor royalty reporting
Your agreement defines gross sales for royalty purposes, and the definition often excludes sales tax and refunds but includes gift-card redemptions and delivery orders. We keep the ledger's sales accounts aligned to that definition so the weekly upload and the monthly royalty statement reconcile without manual adjustments. Any dispute is documented with POS exports the franchisor can trace.
Marketing-fund and local advertising reporting
Brand marketing-fund contributions are a separate percentage from royalties and many agreements also require a minimum local advertising spend, often 1 to 2% of gross sales, with proof on request. We track both in their own accounts and keep invoices attached so the annual attestation is a report, not a search.
Audit rights and record retention
Franchise agreements commonly allow the franchisor to inspect books and POS data, and to charge the audit cost to you if under-reporting exceeds a stated threshold, frequently 2 to 3%. Every sales entry carries its source document in LedgerDesk so an inspection can be answered from the file.
Multi-state sales tax and payroll
Units in different states carry different sales-tax rates, filing frequencies and payroll registrations. We track liabilities by unit and state, prepare the workings, and your registered preparer files; we do not file on your behalf.
Franchises software we work in
More for franchise owners
Other services for franchises
Payment processor reconciliation in other industries
Frequently asked questions
Why does processor reconciliation matter for royalty reporting?
Because royalties are calculated on gross sales, but the bank only shows net deposits after fees, refunds and chargebacks. If net deposits are booked as sales, gross sales are understated and the franchisor's audit clause can be triggered. Reconciling gross to net per unit keeps the royalty base defensible and the fee expense visible.
Can you reconcile several processors and delivery platforms per unit?
Yes, each processor and platform is set up as its own clearing account per unit. Square, Stripe, Toast, DoorDash and Uber Eats payouts are matched to their own reports and deposits, with commissions and adjustments posted separately. The bank reconciliation service for franchise owners then confirms every clearing account nets to zero each month.
How do you treat chargebacks and reserves?
A chargeback is posted as a reduction in receivable with a fee line, and tracked until it is won or lost; a reserve held by the processor is recorded as a receivable from the processor, not as lost sales. Both appear on the exception log until resolved, so the owner can dispute chargebacks on time.
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