August 16, 2011

Settlement Windows

Settlement windows. You may not even know what they are, but there’s a chance they’re costing you extra money.
Simply put, your settlement window is the time window during which you must submit transactions to your processor in order to receive prompt funding. Missing this window can cost you in terms of downgrades, and delay funding of the transactions.

The way you lose money here is when the other elements of your payment processing and auditing cycle don’t line up properly with this window. There are four elements here you should be concerned with: the close of business time you report to Shift4, the date roll on your POS/PMS, your auditing/batch settlement timeframe, and your processor’s funding window. Each must occur in correct sequence for a transaction to fund properly.

For instance, if your close of business time and date roll are not aligned, all transactions that came in after 11:59 p.m. on Friday will be held and settled on Saturday – even though your “Friday night” may not have ended until 2 a.m. Because Shift4 groups transactions by business day, having the POS label transactions that came after midnight as a separate day’s transactions will also lead to discrepancies in your accounting records.

Speaking of accounting, you should ensure that you are closing out (batching) each day’s transactions after the close of business and before the next settlement window. This will keep your transactions from downgrading and help you obtain the lowest possible discount rate. (If you manually audit each batch, your auditor may have to work a night schedule to make this possible.)

While the default settings usually work well for 9-5 merchants, coordinating these settings for 24-hour establishments can be difficult. For resort hotels with multiple revenue centers (all with different hours of operations) or national chains with stores across multiple time zones the difficulty increases exponentially.

Perhaps the easiest way to spot potential errors in this setup is to check your DOLLARS ON THE NET for each fiscal day against the day’s earning in your bank account. (Be sure to subtract any regular fees charged by the bank.) If these numbers don’t match up, contact us at [email protected] and we will be happy to help you review your settlement windows, date roll, and close-of-business settings to determine where the problem might be. We may also be able to add additional Merchant IDs to your account to split processing by time zone or business type – all of these things will help you keep more accurate records, get your money faster, and secure the best possible discount rates.

If you have any questions or concerns, please do not hesitate to contact Shift4 Support at 702.597.2480, option 2.