Payments reconciliation doesn’t have to be a mess (here’s how to fix it)

Revenue’s exciting. Margin is mature. Cash in the bank? That’s the real scoreboard.

But there’s a hidden layer between “sold” and “settled” that most merchants ignore — until they can’t. It’s called reconciliation, and if you’re not doing it (or not doing it well) you’re running your business on guesses and assumptions. Reconciliation is how you make sure your money actually arrived, your fees make sense, and your financial story matches reality.

If that sounds boring, I get it. But here’s the truth: many business problems don’t stem from a lack of revenue, they come from assumptions that were never verified.

I remember watching Chernobyl (amazing show!) and one line stuck with me: “Trust but verify.” It’s exactly how I look at everything I do and see in my day-to-day work.

If you’re trusting your systems, your platforms, your dashboards, or even your colleagues without verifying, you might be flying confidently towards an impending disaster.

So, what is payments reconciliation, really?

Reconciliation is the process of matching financial records across different systems to make sure everything aligns. 

Think of it like a detective story:

1. A payment happens.

2. A series of fees are applied.

3. Funds are routed.

4. A payout lands in your bank.

5. You record it in your accounting tool.

Now: do all those records tell the same story?

Reconciliation is the act of checking, confirming, matching and verifying.

It’s not just “did we get paid?” It’s: did we get paid the right amount, by the right person, at the right time, with the right fees applied? Sounds simple, right?

Why growing merchants can’t afford to ignore payments reconciliation

If you’re running a business with any meaningful transaction volume, payments reconciliation isn’t just back-office housekeeping, it’s financial self-defence. .

Without it, you’re opening the door to silent margin leaks, inaccurate reporting, and operational messes that only show up when it's already too late.

Here’s what happens when reconciliation is missing and why getting it right matters more than most merchants realise:

1.  You might be leaking margin without knowing it

Margins don’t disappear all at once. They erode slowly, quietly, invisibly.

You might be overpaying on fees. Missing refunds. Misclassifying revenue. Reconciling gross sales, but misreporting net revenue.

These aren’t catastrophic errors. They’re the kind of small discrepancies that compound until someone in finance finally asks: “Wait, where did all our margin go?”

2.  Your books might be telling a half-true story

If you’re using automated accounting tools, there’s a chance they’re pulling data from a single source (like your payment provider or sales platform).

But unless you reconcile that with your bank deposits, you’re creating financial statements on blind trust.

That’s fine… until you’re audited, or raising money, or explaining cash flow to your board, or your sales team has questions about their bonuses (nothing sparks an internal manhunt faster).

At which point, guesses become land mines. 

3.  Systems break quietly

Systems rarely blow up with flashing red lights. They fail in subtle ways:

• A webhook that wasn’t processed

• A duplicated refund

• A miscalculated fee after a platform update

• An FX rate drifting off by a few basis points

• A bank line that went missing in sync (I’ve lost entire evenings to this)

Reconciliation is what catches those errors before they snowball into legal headaches, tax errors, or even revenue gaps.

How to reconcile payments across your stack

Unlike writing, you can’t proofread numbers. There’s no spellcheck for payouts.

A misplaced zero, an inverted sign, or a fee that’s 0.3% too high doesn’t trigger alarm bells unless you’re actively verifying it against a known source. Numbers don’t look wrong. They just are wrong.

That’s what payments reconciliation is for. It forces your internal records to match reality: the sales that happened, the money that landed, and the costs in between. Here’s what it takes to do it properly:

Step 1: Collect the right data

Reconciliation starts with raw numbers and unfortunately, they’re scattered. You’ll need to pull in data from across your stack:

• Sales data from your CRM, contract system

• Exports  from your billing and payment platforms

• Bank statements showing what actually hit your bank account

Refund logs, dispute data, and exports from your accounting tools aren’t always essential, but they’ll save time when things don’t add up.

None of this data was designed to work together. But payments reconciliation means forcing it to.

Step 2: Match what happened to what should’ve happened

Now comes the grunt work: comparing systems. You’re looking for alignment across transactions; not just that a sale occurred, but that it settled for the right amount, landed in the right payout, and hit your bank when expected.

You’re checking:

• Were fees deducted correctly?

• Did FX conversions line up?

• Did chargebacks or refunds hit the correct entries?

This is where a lot of merchants stop — because it’s hard. The identifiers never quite match. Timestamps are always off by a few seconds. It feels like solving a Sudoku puzzle after three espressos. But this step is where truth lives and where most issues start to reveal themselves.

Step 3: Investigate the discrepancies

You’ll find breaks. Always. Even in the best-run systems.

Some are obvious: a duplicate transaction, a refund that was never processed, a fee that doesn’t match your rate card. Others are sneakier, like payouts that include mystery items, or “successful” payments that somehow never made it to your account.

This isn’t about pointing fingers. It’s about catching small errors before they snowball into legal questions, tax inconsistencies, or calls from your CFO.

Step 4: Close the loop

Once you’ve matched what happened and resolved the outliers, you can close out that reconciliation cycle.

You now have books you can trust. You can explain cash flow. You can present numbers to your CEO without caveats or crossed fingers. 

Done consistently, payments reconciliation becomes second nature. Not a spreadsheet nightmare, but a habit. A muscle. A moat.

Simplify payments reconciliation with Embed

Let’s call out the elephant in the room: most merchants delay or ignore reconciliation, either because it sounds like boring bookkeeping problems or because they trust the systems blindly. Even younger me had some issues with grasping payments reconciliation. Why wouldn’t I simply trust the output of the system?

But here’s the shift in mindset:

Reconciliation is not accounting. It’s risk management. Everyone and everything can make mistakes (yes, even that one colleague that you blindly trust). But your management team needs to make well informed decisions based on financial numbers. Strategic planning is already stressful as it is, but if you base that on unverified (and potentially incorrect) data, that’s a recipe for disaster. 

So, stop looking at your finance team as “the people chasing errors”, and see them for what they are: critical drivers of strategic execution. They’re the ones making sure the numbers support decisions, not stall them.

And that’s exactly what Embed is built to support.

We give your team the tools to reconcile faster, more accurately, and without duct-taping together spreadsheets across platforms.

Here’s how:

• Granular, transaction-level data that connects every payout to its source (no more guesswork, no more blended black boxes)

• Virtual IBANs to automate matching for use cases like rent or invoice collection, so incoming payments reconcile themselves

• Unified reporting means fewer data silos, fewer integrations, and one source of truth for your financial flows

Whether you’re managing client money, running a platform with hundreds of merchants, or just tired of hunting for missing cents, Embed gives you clean books without the manual mess.

Ready to see it in action? Book a 30-minute call and find out how Embed can help you simplify payments reconciliation from day one.