Building on its strategy of expanding beyond payments acceptance, Stripe Inc. on Wednesday announced the acquisition of Recko Inc., a provider of payments-reconciliation software for Internet businesses. Terms were not disclosed. The deal follows the debut of new applications this year intended to carry out this strategy, such as Stripe Tax.
The addition of Recko to Stripe’s growing portfolio of services will help Stripe merchants automate the payments-reconciliation process. It will also provide merchants with a way to track their financial health, according to Stripe.
For online businesses, especially fast-growing ones, manually reconciling payments can be a time-consuming, tedious, and error-prone process. Payments reconciliation is an accounting process that compares two or more sets of records, such as a company’s internal sales log and its external bank statement, to confirm the accuracy of payments.
As part of the process, the accounting department reviews transaction and payment data to spot discrepancies and accounting errors, and to gain insights into a company’s financial health. For example, a retailer that sold a $100 jacket would reconcile that purchase by matching the recorded sale on its Web site with the $100 payment reported by its payment processor and the $99 deposit (allowing for a $1 processing fee) it receives in its bank account.
One complication during reconciliation is the need to account for such variables as currency conversion, refunds, chargebacks, and bundled bank deposits across all transactions in a given period of time.
The acquisition of Bangalore, India-based Recko brings another set of tools Stripe says it can now offer merchants to let them automate the process of managing and growing their revenue. Other services in this portfolio include Stripe Revenue Recognition, Stripe Billing, and Stripe Invoicing.
“Payments reconciliation shouldn’t be a mild headache that balloons into a migraine as a company grows. It should be an easy, highly automated process,” Will Gaybrick, chief product officer for Stripe, says in a prepared statement. “Stripe helps millions of businesses around the world streamline their revenue management from subscriptions and invoicing to revenue recognition and bookkeeping. With Recko, we’ll automate their payments reconciliation, a critical input into their overall financial health.”
Additional applications available through Recko include:
• Automating the collection of transaction data from financial systems and non-Stripe payment processors, including Excel or CSV attachments saved in emails.
• Allowing businesses to produce weekly, monthly, or quarterly reconciliation reports that highlight potential mistakes or discrepancies.
• Exporting reconciliation reports to third-party tools and platforms that businesses use to understand their financial health.
“No business wants to slow down for tasks that could be automated, especially leaders at high-growth companies,” a Stripe spokesperson tells Digital Transactions News by email. “Helping automate finance operations allows them to spend their time and money where it really matters.”
This manual process of matching transactions is further complicated for fast-growing online businesses, which must also account for things like currency conversion, refunds, chargebacks, bundled bank deposits, and more, across thousands or millions of transactions in a given month, Stripe says, adding these are among the steps Recko automates.