Why payment matching matters
Payment matching – also called payment reconciliation or cash application – connects two worlds: the invoices in your accounting system and the credits in your bank account. Only once a payment is assigned to the right invoice is that invoice considered paid.
If this step is neglected, several problems arise at once:
- Reminders for paid invoices: customers who paid on time receive a reminder. This costs trust and creates queries.
- Wrong key figures: open items and figures such as DSO look worse than they are. See accounts receivable KPIs: calculating and reducing DSO.
- High manual effort: with many small payments, manual matching quickly becomes a daily task.
How automatic matching works
Software for automatic payment matching works in three steps.
1. Retrieve bank transactions
First, the transactions of the business account are loaded – directly via the bank interface, via the accounting system or as a file. Each transaction contains date, amount, the payer's name and bank account, and the payment reference.
2. Compare attributes
The system then looks for the matching open invoice for each credit. Typical attributes are:
- Invoice number in the payment reference: the strongest signal, provided the customer includes it.
- Amount: if it matches the open amount, confidence in the match increases.
- Payer's name or bank account: assigns the payment to a customer even if the invoice number is missing.
- Customer number: useful if customers quote it instead of the invoice number.
3. Assess confidence and settle
The matches determine how certain an assignment is. Clear matches are settled automatically. Uncertain cases, such as a matching name with a different amount, are presented for manual review. This separation is crucial: a wrong automatic match is worse than none, because it marks an open invoice as paid.
Why automatic matching fails
Even good systems reach their limits. The most common causes:
- Missing or wrong invoice number: the customer only writes their name or their own text in the payment reference.
- Partial payments: the customer pays part of the amount, for example because of a complaint or an instalment agreement.
- Bulk payments: one transfer settles several invoices at once, sometimes without saying which.
- Deductions: early payment discounts, fees or credit notes lead to an amount that matches no invoice.
- Different payer: a parent company, a managing director privately or a service provider pays on behalf of the actual customer.
- Duplicate payments: an invoice is paid twice; the second payment needs a refund or offset.
These cases need a clear work list of unmatched payments that is processed regularly.
Special cases: direct debit and payment providers
Not every payment arrives as a single transfer. With SEPA direct debits you collect the amount yourself; matching is usually simple because you link invoice and collection yourself. Returned debits need attention, however: they reopen an invoice that was already settled. Payment providers such as card or online payment services, on the other hand, often pay out in bulk and net of fees. Their settlement report helps to assign the individual payments to invoices.
How to raise the match rate
Many problems can be avoided when the invoice is sent:
- Unique invoice numbers: a consistent format that is clearly distinct from order or customer numbers makes recognition easier.
- Specify the payment reference: ask explicitly on the invoice for the invoice number to be quoted.
- QR code for the transfer: a payment QR code (the EPC QR code, often called "GiroCode" in Germany) transfers amount, IBAN and reference into the customer's banking app without typos.
- Payment details in every reminder: reminders should also contain invoice number, amount and bank details so that the subsequent payment can be matched.
- Match regularly: daily or at least before every dunning run, not only at month end.
Payment matching and dunning belong together
The most important reason for prompt payment matching is dunning. An automated dunning run may only touch invoices that are genuinely open according to current data. The order is therefore: match payments first, then send reminders. How a dunning run is structured overall is described in dunning run: process, timing and when to pause.
Partial payments also affect dunning: if an invoice is partly paid, the next reminder should only state the remaining amount. And payments you deliberately ignore – such as internal transfers – should be marked as such so they do not stay on the work list as open.
How acucollect matches incoming payments
acucollect, the receivables management software by RLOX (product page in German), combines payment matching and dunning in one process:
- Sync with your accounting system: acucollect regularly syncs open invoices with Lexware Office, sevDesk or Odoo 19. Invoices marked as paid there are automatically no longer chased.
- Automatic matching of transactions: the Transactions page shows your bank transactions. acucollect assigns them to open receivables based on invoice number and payer (name or account details), taking partial payments into account.
- Visible confidence: for automatically matched payments you can see how certain the match is, as a percentage.
- A clear work list: filters for Unmatched, Automatic, Manual and Ignored show what remains to be done. You assign unrecognised payments to an invoice in a few clicks or deliberately hide them.
- Complete reminders: every reminder contains invoice number, amount and, if you wish, your bank details, so that the subsequent payment can be matched cleanly.
How to build your dunning levels on top of this is explained in dunning levels: stages, deadlines and fees.
