Reconciliation is the key process used to match payments with invoice items, resulting in detailed, accurate financial reporting while minimizing accounting errors.
In most cases, reconciliation happens automatically. Otherwise, admins with the proper permissions can manually reconcile payments to invoice items.
How it Works
1. View a Transaction's Reconciliation Status
In the client's billing, an icon on the bottom left of every transaction represents the reconciliation status of each invoice, payment, deposit, cancellation and/or credit.
✅ Fully Reconciled: All the invoice items are paid in full or a payment (receipt), deposit, cancellation or credit has been fully matched with invoice items.
🧿 Partially Reconciled: Indicates one or more invoice items aren't paid in full, or a payment hasn't been assigned in full.
⚠️ Not Reconciled: No reconciliations are made.
☑️ Reconciled with Planned Payments: The invoice item(s) are fully matched with installments. This icon remains until all the planned payments have occurred. If the planned payments don't cover the full invoice amount, the Partially Reconciled icon appears once all the installments have occurred.
❗ Reconciliation Error: This is a rare error state. Delete and recreate the reconciliation to fix it. If the error status persists, contact us at support@amilia.com.
2. Automated Reconciliation
Automated reconciliation occurs automatically when:
Making a payment at checkout in the online store;
Paying in installments at checkout in the online store;
A client pays an outstanding balance from their user account;
A recurring subscription is charged followed by an automated payment.
📑 What order are payments reconciled to invoice items?
Automated reconciliation applies the payment to items in the order they are listed on the invoice, from first to last. Installment payments are reconciled to the proper invoice item regardless of where they appear on the invoice.
Below, an admin makes a purchase (on behalf of a client) for $170, with a partial payment of $100 at checkout. Here's how the money is automatically reconciled:
$75 is applied to the 1st invoice item. It's fully paid.
$25 is applied to the 2nd invoice item. There's $50 left to pay for that item.
$0 is applied to the 3rd invoice item because the payment has already been applied to the previous invoice items. There's $20 left to pay for that item.
3. Manual Reconciliation
Admins with the proper permissions can perform manual reconciliations when:
An invoice and its payment are added on different days;
A payment is added in the client's billing (i.e.; not at checkout);
Existing reconciliations are modified by the admin;
Prompting the auto-reconcile tool. Click here for more details.
💰 When making a payment in the client's account
Below, a client has an unpaid invoice that isn't reconciled to any payment.
Expand the invoice & select Make payment, or click Operations>Make payment.
Apply a mark to the invoice that will be reconciled with the payment.
The payment is applied to items in the order they appear on the invoice.
✏️ When modifying existing reconciliations
Admins with the proper permissions can modify a transaction's reconciliations.
In the client's billing, expand the transaction and select Reconciliations.
Click the blue arrow to view how each item is reconciled and click Modify.
You can edit the amount applied to each invoice item. You can't modify the amount applied to items linked to future installments - it won't let you save.
🗑️ When deleting reconciliations
Admins with the proper permissions can delete any existing reconciliations, except for those linked to future installments.
To delete a reconciliation, expand the transaction and click Reconciliations.
Click the garbage can icon to remove all reconciliations from the transaction.
Afterwards, make sure to properly manually reconcile the transaction.
4. How to Find Unreconciled Items
Asides from seeing the reconciliation status of transactions in the client's billing, you can identify client accounts with unreconciled items in the Account and finance>Unreconciled items subtab.
Sort through unreconciled transactions that occurred within the time range.
Click a name to view the Client billing tab. It's always the account owner's name that is shown, even if the unreconciled items are for an account member.
The Receipt ID pertains to the payment, refund, deposit and/or credit that hasn't been reconciled with invoice items.
Frequently Asked Questions
Which permission(s) do I need to manage reconciliations?
Admins require the first two permissions (in the Clients section) to view reconciliations and the last two permissions (in the Finance and reporting section) to modify them:
🔑 View client accounts: View list of client accounts and account details.
🔑 Client billing: View a client's billing page and their transactions.
🔑 Manage reconciliations: Manually add or edit a reconciliation.
🔑 Delete reconciliations: Delete reconciliations.
How do payment reconciliations affect my financial reports?
Payments are linked to the same ledger code as the invoice item they're reconciled with; allowing you to see which payments have been made on your sales. Proper reconciliation affect the accuracy of your payment reports.
Breakdown of payments by ledger code: Lists the payments linked to the ledger code of the item that was sold (including credit memos and invoice details). Unreconciled payments don't appear in this report.
Payment by ledger code: Provides the total amount of payments received and groups them by ledger code and payment method. Unreconciled payments appear in this report in a separate row.
Payment by Item: Tracks every payment, account deposit, refund and payment correction. Unreconciled transactions appear in the report but lack any details on how the transaction was applied.
Can I change the order of automated reconciliation?
Automated reconciliation applies the payment to items in the order they are listed on the invoice, from first to last. Installment payments are reconciled to the proper invoice item regardless of where they appear on the invoice.
This order can't be changed, but admins with the proper permissions can delete reconciliations and manually reapply them in the order they wish.
How do I delete reconciliations for planned payments (i.e., installments)?
You can't modify or delete a reconciliation on an invoice item that's linked to installments. First, you must delete the installment payment from the Upcoming payments subtab. Next, Make a payment to add the installment payment, ensuring it's reconciled to the proper invoice item.
What is the Auto-Reconcile tool?
Admins with the permission to view client accounts and client billing can manually prompt SmartRec to auto-reconcile one or all accounts in the Clients tab. This tool links unreconciled payments to unreconciled invoice items on an oldest to newest basis.
The tool won't necessarily reconcile an invoice and payment that are created the same day. It reconciles the payment with the oldest unreconciled invoice first (and follows the order of invoice items from first to last).
To auto-reconcile all client payments and invoice items in every account
In the Clients>Accounts subtab, click Operations>Reconcile all accounts to reconcile every client account. No need to repeat this for each page of results.
To auto-reconcile all client payments and invoice items for a single account
In the Clients tab, locate the account owner and go to their Client Billing subtab.
Click Operations>Reconcile account.
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