Planning Ahead for Credit Card Reporting

Small businesses will want to review their bookkeeping and accounting practices. Once card payment reporting begins, business owners will need to reconcile the information reports submitted by the banks to their own books. Any discrepancies in reporting will need to be addressed so that accurate tax returns can be filed with the IRS. I expect further details regarding this issue after the Treasury Department issues regulations about how banks are supposed to be reporting credit and debit card transactions.
One bookkeeping issue is becoming clear. The new law requires banks to report gross receipts. However, merchants often have chargebacks, issue refunds, or have debit card transactions where the customer receives cash back. Businesses should have thorough accounting procedures to keep track of these items.