Reconcile payments

Reconciliation is the process of ensuring that financial records match across different systems. For payment processing, we recommend implementing a three-way reconciliation approach:

1. Your internal records (transactions processed through your system)
2. The settlement report from Rootline
3. The actual bank statement showing received funds

This triangulation provides comprehensive verification that all transactions are properly accounted for, ensuring accuracy in your financial records and highlighting any discrepancies that need investigation.

Automated reconciliation flow

The general reconciliation flow works as follows:

1. Payout initiation:

   • A payout is created containing amount, date, statement descriptor, and settlement report_id (if available);
   • Funds are transferred to your bank account or your sellers' accounts.

2. Webhook notification:

   • When the settlement report is generated, a report.created webhook is sent.

3. Report retrieval:

   • The webhook contains a download_url that platforms can use to fetch the report;
   • This applies to both your own settlement reports and reports for your users.

4. Report processing (recommended):

   • Parse the report into your platform system;
   • This report includes the payout details including a statement descriptor. The report contains all payments and other mutations for the account and time period;
   • Convert it to a platform-native report or table that includes additional platform-specific data.

Platform reconciliation process

To reconcile your platform's finances:

1. Monitor your bank statement for incoming payouts from Rootline;
2. Use the statement descriptor on the bank statement to match it with the payout's statement descriptor in the settlement report;
3. Verify that:
   • The payout amount matches what you received in your bank account;
   • All transactions in the settlement report match your internal records;
   • Fees and deductions are correctly applied.

Automating reconciliation for platform users

As a platform, you can facilitate reconciliation for your users:

1. Expose the platform-native settlement report to your users through your interface;
2. Provide clear instructions on how to match the report details with the amounts and statement descriptor appearing on their bank statements;
3. Consider adding features that automate the matching process.

Example: Tracking a payment with splits

Consider a scenario where a platform processes a €20.00 payment with a split to an account of a merchant:

1. For account of your platform user (merchant):

   • The report shows an incoming payment of €20.00;
   • A platform fee of €0.50 is deducted;
   • The net amount is €19.50;
   • If this is the only transaction for this period, the report shows the payout of €19.50 to the merchant's bank account including a statement descriptor;
   • Your merchant will find the statement descriptor on their bank statement and can now match it with the statement descriptor in the report;
   • They can consider the payment of €20.00 reconciled.

2. For your platform account:

   • The report shows the original payment of €20.00;
   • The split amount of -€20.00 recursively "transferred" to the merchant;
   • The platform revenue of €0.50 received from the merchant;
   • Various processing fees (interchange, scheme, markup) deducted for this payment;
   • A net amount of €0.35 retained on your account;
   • If this is the only transction for this period, the report will show the payout of €0.35 along with a statement_descriptor;
   • You will find the amount of € 0.35 as well as the statement descriptor on your bank statement, allowing you to match the received funds to the paid out amount in the report;
   • Additionally, you can match the individual mutations in the report to your own records and consider them reconciled.

By implementing this reconciliation process, you can ensure all financial transactions are accurately tracked and accounted for, providing transparency for both you and your platform users.