Lead-to-cash/Stage 6 of 7

Reconcile

Matching payments to invoices and closing them out.

What happens at this stage

Money arriving is not the end of the cycle. The reconcile stage matches each payment to the invoice it pays, handles short payments, overpayments, and bank fees, and marks invoices as settled so the ledger reflects reality.

Until a payment is applied, the invoice still looks unpaid: customers get wrong reminders, cash forecasts are off, and month-end close takes longer than it should.

Where it usually breaks

  • Payments arrive without an invoice reference and sit unapplied.
  • Short payments and deductions are written off instead of followed up.
  • Bank, payment processor, and ledger records are matched by hand at month end.

Metrics to watch

  • Unapplied cash balance
  • Days to apply a payment
  • Short-pay and deduction value

Free tools for this stage

No signup needed to start.

Invoice vs Payment Reconciliation

Match payments to an invoice and see whether it is paid in full, short paid, or overpaid.

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Revenue