***

title: Reconciliation Workflows
subtitle: Match billing records against payment settlements
slug: reporting/reconciliation-workflows
---------------------

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## What this covers

This reference covers Prolifi's reconciliation workflow and the billing artefacts that feed into it. It addresses:

* What reconciliation means in the Prolifi context
* Billing artefacts and transaction records
* The reconciliation workflow step by step

Reconciliation and reporting represent **Phase 6** of the Prolifi platform flow -- the final phase of the operational billing cycle, and the phase that produces the financial outputs required by Finance, Accounting, and Compliance teams.

## Prerequisites

<Note>
  Before running reconciliation:

  * Payment gateways are connected and settlement data is available -- see [Getting Started: Finance](/getting-started/finance)
  * Invoices have been generated and payment collection has run -- Phases 1-5 of the platform flow must be complete for the period being reconciled
  * Revenue recognition rules are configured per product type -- see [Revenue Recognition](/reporting/revenue-recognition)
</Note>

## 1. What Reconciliation Means in the Prolifi Context

**Reconciliation** (see [Glossary: Reporting and Global Terms](/glossary/reporting-global-terms)) is the process of comparing two independent records of the same financial events to confirm they agree -- and investigating any differences.

In Prolifi, reconciliation operates across two levels:

### Level 1 -- Prolifi invoice records vs. payment gateway settlement records

This is the primary reconciliation. Prolifi records what invoices were generated, what payment was attempted, and what the outcome was. The payment gateway records what was actually settled into your bank account.

These two records should agree, but they can diverge due to:

* Gateway processing fees (the gateway settles the net amount after deducting its fee)
* Timing differences (a payment attempted on the last day of the month may settle in the following month)
* Refunds processed directly in the gateway (not reflected in Prolifi until recorded)
* Currency conversion differences on FX transactions
* Chargebacks and disputes handled directly by the gateway

### Level 2 -- Prolifi records vs. accounting system records

A secondary reconciliation ensures that the amounts reported in Prolifi's revenue recognition and billing summaries match the entries in your accounting system (e.g., Xero, QuickBooks, NetSuite, SAP).

This level requires exporting Prolifi data and comparing it to your accounting system's entries for the same period.

## 2. Billing Artefacts and Transaction Records

The following artefact types are the inputs to the reconciliation process:

### 2.1 Invoices

(See [Glossary: Billing Terms](/glossary/billing-terms))

Invoices are the primary billing artefacts. Each invoice record in Prolifi contains:

* Invoice ID and number
* Customer reference
* Operating entity
* Invoice date and due date
* Line items (product, quantity, unit amount, period covered)
* Tax lines (rate, amount, jurisdiction)
* Total net amount, total tax, total gross
* Applied discounts and credit notes
* Current state (Paid, Partial Paid, Not Paid, Void, Dispute, etc.)
* Payment events (each collection attempt and its outcome)
* All timestamps and user actions performed on the invoice

### 2.2 Credit notes

(See [Glossary: Billing Terms](/glossary/billing-terms))

Credit notes are negative artefacts -- they reduce what a customer owes or acknowledge an overpayment. Credit note records contain:

* Credit note ID and number
* The invoice the credit note is applied against (if linked)
* Reason code
* Amount and currency
* Tax treatment (proportional credit of original invoice tax)
* Status (applied to next invoice, converted to refund, or standing balance)

### 2.3 Transactions

A transaction record represents a specific payment attempt. Each transaction record carries:

* Transaction ID
* Gateway reference (the payment processor's identifier for this transaction)
* Invoice the transaction applies to
* Amount attempted and currency
* Payment method type (card, bank account, local method)
* Outcome (succeeded, failed, pending)
* Failure reason code (for failed transactions)
* Gateway response data
* Timestamp

<Warning>
  Transactions are immutable -- they cannot be altered once created. They form part of the audit trail.
</Warning>

### 2.4 Refunds

A refund record represents funds returned to a customer:

* Refund ID
* Original transaction the refund is against
* Refund amount (full or partial)
* Refund type (to original payment method, or as credit note)
* Gateway refund reference
* Status (pending, completed, failed)
* Timestamp

### 2.5 The audit trail

(See [Glossary: Reporting and Global Terms](/glossary/reporting-global-terms))

The audit trail is the immutable, time-ordered record of every event in the billing system:

* Every invoice created, modified, or voided
* Every payment attempt and outcome
* Every credit note issued
* Every refund processed
* Every entitlement change
* Every subscription lifecycle event
* Every user action (including who performed it and when)

<Warning>
  The audit trail cannot be deleted or modified. It is the authoritative record for dispute resolution, financial audits, and compliance reviews.
</Warning>

## 3. Reconciliation Workflow

### 3.1 Step 1 -- Prepare source data

Gather the two datasets to be reconciled:

**From Prolifi:**
Export the invoice collection report for the period (by operating entity). This report shows:

* All invoices collected in the period
* Collection date, amount, currency, payment method
* Prolifi's internal transaction reference

**From your payment gateway:**
Export the settlement report for the same period. This report shows:

* All settlements received from the gateway
* Settlement date, amount (net of fees), currency
* Gateway's transaction reference

### 3.2 Step 2 -- Run the reconciliation in Prolifi

Prolifi's automated reconciliation tool compares the Prolifi collection records against the gateway settlement records:

1. Navigate to Reporting > Reconciliation
2. Select the operating entity
3. Select the period (typically the previous month or week)
4. Import or connect the gateway settlement data (depending on integration capability)
5. Prolifi performs the matching

**Matching logic:**

* Match by gateway transaction reference (the most reliable match)
* Match by amount, currency, and approximate date (for records without a direct reference match)
* Flag unmatched records from both datasets for manual review

### 3.3 Step 3 -- Review the reconciliation report

The reconciliation report shows three categories:

**Matched records:**
Prolifi collection records that have been matched to a gateway settlement record. These are reconciled and require no action.

**Unmatched Prolifi records (Prolifi has it, gateway doesn't):**
Possible causes:

* Payment was collected near period-end and will settle in the next period -- check the following period's gateway data
* Collection was attempted but the gateway has not settled it yet -- timing issue, check again later
* The transaction failed at gateway level but was not properly flagged in Prolifi -- investigate

**Unmatched gateway records (gateway has it, Prolifi doesn't):**
Possible causes:

* Refund or chargeback processed directly in the gateway -- record in Prolifi and create corresponding credit note
* Payment received outside Prolifi's managed flow -- record as an offline payment
* Gateway fee deducted from the settled amount -- document the fee as an expected difference

### 3.4 Step 4 -- Resolve discrepancies

For each unmatched record:

1. Investigate the cause (refer to the possible causes above)
2. Determine the correct resolution:
   * Is it a timing difference that will self-resolve?
   * Does a record need to be created in Prolifi (offline payment, credit note, void)?
   * Does it need escalation to the payment gateway?
3. Document the resolution in the reconciliation record with a note
4. Mark the item as resolved

### 3.5 Step 5 -- Sign off and close

Once all items are matched or resolved (and documented):

* Finance team lead signs off that reconciliation for the period is complete
* The reconciliation report is archived for the period
* Any systematic discrepancy patterns are flagged for investigation (e.g., if the same type of discrepancy appears every month, there may be a configuration issue)

### 3.6 Reconciliation cadence

<Tip>
  **Recommended frequency:** Weekly reconciliation during the month catches issues early and reduces the burden at month-end. Monthly reconciliation only is the minimum.
</Tip>

**Month-end close procedure:**

1. Complete the weekly reconciliation for the final week of the month
2. Run a final month-end reconciliation pass to catch any remaining items
3. Export the reconciliation report for the month
4. Reconcile Prolifi's revenue recognition output against the accounting system
5. Sign off and close the period

***

## Related pages

* [Revenue Recognition](/reporting/revenue-recognition) -- ASC 606 and IFRS 15 compliant revenue recognition
* [Financial Reports](/reporting/financial-reports) -- Subscription metrics, billing operations, and financial reporting
* [Getting Started: Finance](/getting-started/finance) -- Finance team onboarding guide
* [Dunning and Payment Recovery](/payments-recovery/dunning-payment-recovery) -- Payment retry and recovery workflows
* [Tax Management](/global-operations/tax-management) -- Tax configuration and compliance
* [Multi-Country Setup](/global-operations/multi-country-setup) -- Operating entity and multi-currency setup
* [Glossary: Reporting and Global Terms](/glossary/reporting-global-terms) -- Key terms for reconciliation and reporting