The Reconciliation report and Posted Spending reports are both powerful tools that can be used to perform regular accounting activities and gain program insights, respectively. In reviewing these reports, you may notice that they don't align perfectly. This is expected and intentional as these reports serve different purposes.
Individual employee benefit balances are maintained within notional liability accounts. Contributions, expenses, and expirations all impact the notional liability balance, but real money movement only occurs as a result of card spending or reimbursement payments.
The Reconciliation report will track every penny of real money movement within your Benepass programs, such as outgoing reimbursement payments, card authorizations and transactions, as well as platform funding activities. This report will not include notional movements such as contributions, expirations, or expense approvals.
The Posted Spending report will track all impacts to employee benefit balances, both notional and real. This report will include all approved reimbursements (regardless of payment status) and completed card transactions. Importantly, this report will not include card authorizations nor will it indicate payment status of approved reimbursements.
To perform cash reconciliation and similar close of book activities, Benepass recommends utilizing the Reconciliation Report fully as it will only include real money movements that have been fully completed during a given time period. This report is designed specifically for this kind of cash reconciliation, using the categories of card transactions, authorizations, and holds, along with reimbursement payments and other real money movements (such as merchant refunds) to outline all impacts between starting and ending period balances.
We recommend that the Posted Spending Report be used for utilization reports to help program administrators understand their program spending trends and use cases. This report should not be used as a companion report to the Reconciliation report as these two different reports are designed to be utilized in their own right.
If attempting to compare the Reconciliation and Posted Spending reports concurrently, there are several inevitable variances that can occur.
Card Authorization Holds and Releases
When an employee swipes their card, the merchant will first place an authorization hold, to ensure the employee has sufficient balance to pay for the transaction. Once that's confirmed and the transaction is processed, the merchant will release the initial hold, effectively sending the held amount back to the employee's balance. This process can take anywhere from a few minutes to several days.
As such, transactions may be initiated in July but fully close in August. Because real money movement occurs when an authorization is placed, the card authorization will appear in the July reconciliation report, and then the transaction and release will appear in August. This results in real money movement in both July and August.
However, the Posted Spending report will not include the transaction until it is fully completed in August. This means there will be real money movement in July that will not tie to a transaction present in the Posted Spending report. Open authorizations and releases can result in small variances if compared directly against the Posted Spending report.
Unpaid Approved Reimbursements
Reimbursements will be present in the Posted Spending report once they've been approved, but the impact to your actual funding and cash balances will only be recorded in the Reconciliation report once they've been sent via ACH. While we automatically send approved payments within one day, there are cases where an approval may fall on the last day of the month and payment occur the next day in the following month. Similarly, while rare, if a connection interruption occurs with an employee's linked bank, there may be an additional delay while the account is reconnected.
Similarly, with employees that are reimbursed via company payroll, rather than ACH, their approved expenses will be present on the Posted Spending report, but will not appear on the Reconciliation report.
Tracking Reimbursement Payments
When an employee's reimbursement is approved, those funds are "deposited" into a payout liability balance at the individual benefit level. Every day, those balances are paid out to the employee via ACH. For example, if an employee had $100 approved under their Wellness benefit and $50 approved under their Work From Home benefit, Benepass would send two payments - one for $100 and another for $50.
The Benepass system logs timestamps when a reimbursement is submitted, and when it is approved. However, once the funds are approved and moved to the payout liability balance, it is no longer an individual line item that can be tracked as paid, and instead a total held balance. As a result, Benepass does not log individual payment statuses on reimbursements, nor will the Reconciliation report include individual expense line items.
Because ACH payments are sent for each individual benefit, however, the Reconciliation report will keep a record of which associated benefit a payment has been made from. This can allow for departmental budgeting and tracking using the Reconciliation report.