

Card Payment Reconciliation Issues
Most merchants we speak to encounter the same two reconciliation challenges:
- Are they being paid what they’re due?
Transaction fees, foreign exchange markups, and deductions from payment providers are often poorly documented or unclear. - How can they streamline the process and improve accuracy?
Despite technological advances elsewhere in finance, reconciliation remains largely manual and time-consuming.
These aren’t just accounting headaches. Reconciliation is a critical control function. It gives merchants visibility into their payment flows, allows them to challenge costs, identify errors early, and make confident decisions based on accurate data.
This article explores the fundamentals of payment reconciliation, how it works, the different types involved, and what best practices can help merchants regain control.
What Is Payment Reconciliation?
Payment reconciliation is the process of comparing internal financial records (such as invoices or ledger entries) with external documents (such as bank or payment processor statements) to ensure that all transactions are accurate, complete, and properly recorded.
It allows businesses to verify that the payments they expect to receive or have sent match actual cash movements. This process is essential for preventing errors, fraud, and financial misreporting.
How Does Payment Reconciliation Work?
While the exact process varies depending on the tools and systems used, payment reconciliation typically involves the following steps:
- Data Collection
Gather relevant documentation from banks, payment providers, accounting systems, and internal sales or billing platforms. - Transaction Matching
Compare individual transactions across all sources. Match values, transaction IDs, dates, and references to ensure consistency. - Discrepancy Identification
Flag any mismatches, missing items, duplicate entries, or unexpected costs such as processing fees. - Discrepancy Resolution
Investigate and resolve mismatches by correcting errors, chasing missing funds, or updating accounting entries. - Adjustments and Corrections
Post any necessary corrections—such as fees, foreign exchange differences, or misallocations—back into the accounting system. - Balance Verification
Ensure that the final reconciled total in the internal records matches the balance reported by banks or PSPs. - Documentation and Review
Keep a record of the process, including any errors and their resolutions. Larger businesses may also require management approval.
Reconciliation is typically performed monthly, but can be done more frequently depending on business size and transaction volume.
Streamlining Reconciliation Through Integration
As payment ecosystems become more fragmented, many merchants now process transactions through multiple gateways, wallets, and currencies, making reconciliation even more complex. Integrating reconciliation tools with your existing tech stack (such as accounting software, payment platforms, and ERP systems) is one of the most effective ways to streamline the process. Integrated systems allow for real-time data sync, reduce the need for manual file imports, and improve accuracy by standardising data formats across sources. By creating a single source of truth, integration not only speeds up reconciliation but also enhances visibility across all payment methods and providers, giving finance teams the insight and confidence to make faster, more informed decisions.
Types of Payment Reconciliation
Depending on the nature of a business’s operations, several forms of reconciliation may be necessary:
Bank Reconciliation
Ensures that the business’s internal cash records match the balances and transactions reported by its bank.
Credit Card Reconciliation
Used to verify credit card transactions against the statements received from card providers or acquirers.
Accounts Receivable Reconciliation
Matches customer payments against issued invoices to confirm accuracy and identify underpayments, overpayments or unallocated funds.
Accounts Payable Reconciliation
Ensures that supplier invoices and credit notes match the payments made by the business, helping to prevent duplicate payments or missed obligations.
Intercompany Reconciliation
For businesses with multiple legal entities, this process reconciles transactions between those entities to avoid mismatches in consolidated accounts.
Payroll Reconciliation
Confirms that salaries, deductions, taxes and benefits are accurately calculated and recorded.
General Ledger Reconciliation
Ensures that all ledger accounts, including revenue, costs and liabilities, reflect the true state of the business by reconciling to subledgers or transaction data.
Batch Payment Reconciliation
Batch payment reconciliation is the process of matching aggregated payments, such as settlements from marketplaces, platforms or bulk supplier payouts, to the corresponding grouped transactions in the accounting system. Rather than reconciling each transaction individually, businesses align payment batches with internal records to ensure totals, deductions, and fees are accurate. This is particularly useful for high-volume businesses where individual transaction-level reconciliation would be time-consuming. When executed well, batch reconciliation saves time while maintaining financial accuracy, though it requires detailed reporting and consistent categorisation.
Why Payment Reconciliation Matters
Accurate reconciliation underpins healthy financial management. Its benefits include:
- Error Detection
Spot and fix data entry issues, misallocations, or omitted transactions. - Fraud Prevention
Identify unauthorised transactions or suspicious activity early. According to the Association of Certified Fraud Examiners, businesses lose an average of 5% of annual revenue to fraud, much of it detectable through careful reconciliation. - Cash Flow Accuracy
Get a real-time understanding of available cash, allowing for smarter spending and investment decisions. - Financial Integrity
Ensure that financial statements are an accurate reflection of business activity, supporting transparency with stakeholders. - Regulatory Compliance
Meet obligations under tax, accounting and audit regulations by maintaining traceable and accurate records. - Improved Decision-Making
Reliable financial data supports better forecasting, budgeting and performance analysis.
Best Practices for Payment Reconciliation
To get the most from your reconciliation process, consider implementing the following practices:
- Reconcile regularly
Monthly is standard, but high-volume businesses may benefit from daily or weekly checks. - Segregate duties
Assign different people to handle transaction posting and reconciliation for stronger internal controls. - Leverage technology
Use reconciliation software or automation tools to reduce manual work and improve accuracy. - Standardise your process
Develop and document procedures that staff can follow consistently. - Train your team
Ensure that the staff involved understand accounting principles and reconciliation systems. - Document everything
Keep detailed logs of adjustments, justifications, and resolutions. - Act promptly
Investigate mismatches as soon as they’re identified to prevent escalation. - Review and improve
Conduct periodic audits of your reconciliation process and refine your approach.
Wrapping It Up
Payment reconciliation is not just a back-office task—it’s a strategic business function. It ensures financial data is accurate, payments are accounted for, and errors or irregularities are addressed quickly. With growing payment complexity across platforms, currencies and providers, taking a structured and proactive approach to reconciliation can help merchants gain clarity, reduce losses, and make confident financial decisions.