Finance
Payment Reconciliation
Payment reconciliation is the process of matching a payment to an outstanding invoice or accounting entry. It ensures that cash movements are recorded correctly and that open items in the system are marked as settled. This helps companies maintain a reliable view of amounts due and payments already received. Payment reconciliation also helps prevent errors in financial accounting and makes it easier to trace the actual status of outstanding items. After a bank transfer is received, the system checks which invoice the amount should be assigned to and whether it has been paid in full.
