Payment reconciliation
Reconciliation proves that what was posted matches what the bank received. It is the control that catches the payments posting never saw.
Updated
Payment reconciliation is the check that the payments recorded in the billing system match the funds actually received in the bank, remittance by remittance and deposit by deposit. It answers a question posting cannot answer about itself: is anything missing?
Posting is self-referential — it can only record the remittances it was given. Reconciliation compares that record against an independent source, the bank, which is what makes it a control rather than a second look.
In practice
The failure it exists to catch is a deposit with no posted remittance: money in the account that no claim has been credited for. The claims behind it still look unpaid, so they may be followed up, refiled, or written off, while the payment for them is already sitting in the bank. Nothing about that state produces an alarm — the cash is there, and the A/R is wrong.
It catches the reverse too. A remittance posted with no matching deposit means a payment was explained and never arrived, or arrived reduced by a recoupment nobody accounted for.
Commonly confused with
- Payment posting: Posting records the payer's decision. Reconciliation verifies that record against the bank — a different question, answered from a different source.
- Denial work: Denial work responds to a decision that was posted. Reconciliation looks for the money that was never posted at all.