Payment Reconciliation
Overview
Payment Reconciliation – Business Overview
Payment Reconciliation is a business document used to match incoming or outgoing payments with the correct invoices or financial obligations. Its main purpose is to ensure that all payments recorded by the business are accurately applied to the right customers, suppliers, or accounts, keeping financial records clean, reliable, and up to date.
What Payment Reconciliation Is Used For
In day-to-day operations, payments are often received or made without being immediately linked to specific invoices. This can happen due to:
- Partial payments
- Bulk payments covering multiple invoices
- Advance payments
- Bank deposits received without clear references
Payment Reconciliation allows finance teams to review these payments and correctly allocate them to the appropriate invoices or balances. This ensures accurate customer statements, supplier balances, and financial reports.
Prerequisites and Setup Before Use
Before using Payment Reconciliation, the following should already be in place:
- Customers and suppliers are properly set up in Dafater
- Sales invoices, purchase invoices, or other payable/receivable documents are already recorded
- Payments (such as receipts or disbursements) have been entered into the system
- Accounting periods are open and active
Having clean and updated invoice and payment data is essential for effective reconciliation.
Typical Workflow and Business Process Fit
A common business workflow for Payment Reconciliation looks like this:
Payment Received or Made
A payment is recorded when money enters or leaves the business, often without being linked to a specific invoice.Review of Outstanding Balances
The finance team reviews open invoices and unmatched payments.Creation of Payment Reconciliation
The Payment Reconciliation document is used to match one or more payments to one or more invoices.Confirmation and Posting
Once confirmed, balances are updated, invoices are marked as partially or fully paid, and customer or supplier accounts reflect the correct position.Reporting and Follow-up
Accurate reconciliation supports reliable aging reports, statements, and cash flow analysis.
This process typically fits into the month-end closing cycle, daily cash management, or routine accounts receivable and payable operations.
Key Business Scenarios Where It Is Essential
Payment Reconciliation is especially important in the following situations:
- Customers paying multiple invoices with one payment
- Partial payments against large invoices
- Advance payments received before invoices are issued
- Bank deposits with unclear references
- Correcting misapplied or wrongly allocated payments
- Ensuring accurate customer and supplier statements
Without proper reconciliation, businesses risk overstated receivables, incorrect follow-ups, and misleading financial reports.
Important Considerations for Users
- Always verify payment amounts and dates before reconciling
- Ensure invoices are correct and approved prior to reconciliation
- Avoid reconciling payments across different customers or suppliers incorrectly
- Regular reconciliation prevents buildup of unmatched balances
- Perform reconciliation frequently, not just at month-end
Using Payment Reconciliation consistently helps maintain financial accuracy, improves trust in reports, and supports better cash flow management across the business.
Basic Information
- Module: Accounts
- Document Type: Other
- Type: Single (Configuration)
Fields
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| company | Company | Link | ✓ | Company | Company within Dafater where payment reconciliation is performed |
| party_type | Party Type | Link | ✓ | DocType | Type of business party involved in reconciliation process |
| party | Party | Dynamic Link | ✓ | party_type | Specific customer or supplier being reconciled |
| receivablepayableaccount | Receivable / Payable Account | Link | ✓ | Account | Account tracking receivables or payables for the selected party |
| defaultadvanceaccount | Default Advance Account | Link | Account | Default account used for advance payments or receipts | |
| frominvoicedate | From Invoice Date | Date | - | Start date to filter invoices for reconciliation | |
| frompaymentdate | From Payment Date | Date | - | Start date to filter payments for reconciliation | |
| minimuminvoiceamount | Minimum Invoice Amount | Currency | - | Lowest invoice amount considered during reconciliation | |
| minimumpaymentamount | Minimum Payment Amount | Currency | - | Lowest payment amount considered during reconciliation | |
| toinvoicedate | To Invoice Date | Date | - | End date to filter invoices for reconciliation | |
| topaymentdate | To Payment Date | Date | - | End date to filter payments for reconciliation | |
| maximuminvoiceamount | Maximum Invoice Amount | Currency | - | Highest invoice amount considered during reconciliation | |
| maximumpaymentamount | Maximum Payment Amount | Currency | - | Highest payment amount considered during reconciliation | |
| invoice_limit | Invoice Limit | Int | - | Maximum number of invoices fetched for reconciliation | |
| payment_limit | Payment Limit | Int | - | Maximum number of payments fetched for reconciliation | |
| bankcashaccount | Bank / Cash Account | Link | Account | Bank or cash account used for payment entries | |
| cost_center | Cost Center | Link | Cost Center | Cost center associated with reconciled transactions | |
| invoice_name | Filter on Invoice | Data | - | Specific invoice reference to filter reconciliation | |
| invoices | Invoices | Table | Payment Reconciliation Invoice | List of invoices selected for reconciliation | |
| payment_name | Filter on Payment | Data | - | Specific payment reference to filter reconciliation | |
| payments | Payments | Table | Payment Reconciliation Payment | List of payments selected for reconciliation | |
| allocation | Allocation | Table | Payment Reconciliation Allocation | Allocation details mapping payments against invoices |
Child Tables
Invoices (Payment Reconciliation Invoice)
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| invoice_type | Invoice Type | Select | Sales Invoice, Purchase Invoice, Journal Entry | Type of invoice selected for reconciliation in Dafater. | |
| invoice_number | Invoice Number | Dynamic Link | invoice_type | Linked invoice or journal entry reference for reconciliation. | |
| invoice_date | Invoice Date | Date | - | Date the invoice was issued for reconciliation. | |
| amount | Amount | Currency | currency | Total invoice amount considered during reconciliation. | |
| outstanding_amount | Outstanding Amount | Currency | currency | Remaining unpaid amount pending reconciliation. | |
| currency | Currency | Link | Currency | Transaction currency used for the invoice in Dafater. | |
| exchange_rate | Exchange Rate | Float | - | Conversion rate applied between invoice and company currency. |
Payments (Payment Reconciliation Payment)
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| reference_type | Reference Type | Link | DocType | Document type being reconciled in Dafater payment process | |
| reference_name | Reference Name | Dynamic Link | reference_type | Specific document linked for payment reconciliation | |
| posting_date | Posting Date | Date | - | Accounting date when payment reconciliation is recorded | |
| is_advance | Is Advance | Data | - | Indicates whether payment is treated as advance | |
| reference_row | Reference Row | Data | - | Row identifier linking to specific document line | |
| amount | Amount | Currency | currency | Payment amount applied against the referenced document | |
| difference_amount | Difference Amount | Currency | currency | Remaining or excess amount after reconciliation | |
| remarks | Remarks | Small Text | - | Additional notes explaining reconciliation details | |
| currency | Currency | Link | Currency | Currency in which the payment amount is recorded | |
| exchange_rate | Exchange Rate | Float | - | Rate used to convert payment currency to base currency | |
| cost_center | Cost Center | Link | Cost Center | Cost center impacted by the reconciled payment |
Allocation (Payment Reconciliation Allocation)
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| reference_type | Reference Type | Link | ✓ | DocType | Source document type being reconciled in Dafater. |
| reference_name | Reference Name | Dynamic Link | ✓ | reference_type | Specific source document linked for reconciliation. |
| reference_row | Reference Row | Data | - | Row identifier within the referenced document. | |
| invoice_type | Invoice Type | Link | ✓ | DocType | Invoice document type applied during payment reconciliation. |
| invoice_number | Invoice Number | Dynamic Link | ✓ | invoice_type | Specific invoice linked for payment allocation. |
| allocated_amount | Allocated Amount | Currency | ✓ | currency | Amount allocated from payment against the invoice. |
| unreconciled_amount | Unreconciled Amount | Currency | currency | Remaining amount not yet reconciled. | |
| amount | Amount | Currency | currency | Total amount considered for this allocation. | |
| is_advance | Is Advance | Data | - | Indicates whether payment is treated as advance. | |
| difference_amount | Difference Amount | Currency | Currency | Gain or loss amount due to reconciliation differences. | |
| gainlossposting_date | Difference Posting Date | Date | - | Posting date for recording gain or loss. | |
| difference_account | Difference Account | Link | Account | Account used to post reconciliation differences. | |
| exchange_rate | Exchange Rate | Float | - | Exchange rate applied for currency conversion. | |
| currency | Currency | Link | Currency | Currency used for the allocated amounts. | |
| cost_center | Cost Center | Link | Cost Center | Cost center associated with the reconciled transaction. |
Permissions
| Role | Read | Write | Create | Delete | Submit | Cancel |
|---|---|---|---|---|---|---|
| Accounts User | ✓ | ✓ | ✓ | ✓ | ||
| Accounts Manager | ✓ | ✓ | ✓ | ✓ |
Related DocTypes
| DocType | Relationship | Module |
|---|---|---|
| Account | Links to | Accounts |
| Company | Links to | Setup |
| Cost Center | Links to | Accounts |