Overview

Modern Treasury’s Reconciliation Engine helps you match transactions at your financial institution with your internal records. For example, automatically reconcile your bank statement to invoices to automate revenue recognition and update accounts receivable.

There are five components to the platform:

• Ingestion: Import transaction and payments data from any bank or payment processor.
• Enhancement: Normalize and prepare the raw data for reconciliation.
• Automatic Reconciliation: Reconcile 1-to-1 or many-to-1, using pre-built or custom rules.
• Exception Management: Detect and resolve exceptions with a collaborative finance ops tool.
• Sync: Export results to ERPs, data warehouses, spreadsheets, or receive instantly as webhook events.

For payments sent using Modern Treasury, all Payment Orders will be automatically reconciled – which you can use to update your internal records.

For all other payments, including payments you receive, you will create Expected Payments to represent your internal records (e.g., invoices) to automatically reconcile it to your transactions.

Why is reconciliation important?

Reconciliation is the process of verifying cash transactions, and confirming that your internal records agree with your bank or payment processor. It’s also called bank reconciliation, cash reconciliation, or payment reconciliation.

Common use cases:

• Product teams use it to report accurate balances or payment statuses in real-time.
• Payment operations teams use it to identify payment discrepancies and errors.
• Finance and accounting teams use it to close the books accurately and quickly.

Accurate and automated reconciliation helps businesses:

• Deliver a better product experience
• Reduce financial and operational risk
• Scale and operate more efficiently
• Make better decisions with better cash insights

Get in touch if you have any questions about the Reconciliation Engine.

Calculating your Reconciled Volume

Reconciled Volume refers to the total volume of transactions that are reconciled through Modern Treasury. A Transactions is an object that contains data about money that moved in an account you have connected to Modern Treasury. The most common use case for a transaction is a bank transaction at a bank account. For example, a transaction might contain data that tells you "I received $20 in this bank account".

Each transaction has an attribute that specifies if it has been reconciled: transaction.reconciled. A transaction may be reconciled by Modern Treasury if:

• It is linked to payments that you have originated, either via a Payment Order or Reversal.
• It is linked to Return(s). The most common case for this is when payment orders are returned, such as an ACH return.
• It is linked to Paper Item(s) or Incoming Payment Detail(s), which indicates that that you have received a payment. Common examples here are when you receive a check in your lockbox or when you receive a payment in a virtual account. Note: this is legacy behavior that may not be present on your account
• It is linked, either automatically or manually, to Expected Payment(s).

These links are set via Transaction Line Items, which is a one-to-many relationship between the Transaction and any objects that it has been reconciled to.

Reconciled Dollar Volume is the sum of the amounts of all reconciled transactions. Reconciled Transaction Count is the count of reconciled transactions.

Your agreement with Modern Treasury may specify terms for Dashboard Payments. These refer to payments (Payment Orders, Reversals) that a customer has manually initiated through the web dashboard. Dashboard Payments do not include any Transactions initiated, received or processed via API, spiders, robots, scripts, crawlers, data mining tools or other automated means (all of which will count as Transactions for purposes of usage metrics and fees).