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This feature is part of Formance Enterprise Edition.
Formance Reconciliation compares balances between your Formance Ledger and cash pools to verify financial consistency and identify any discrepancies that need investigation. Regular reconciliation is critical for producing reports that prove the assets in your ledger are backed by actual funds, ensuring audit compliance and financial integrity.

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How It Works

Formance currently supports account-based reconciliation, which compares the total balances of accounts in your Formance Ledger with the balances from your cash pools. You create policies that define which ledger accounts to compare with which cash pools. For reconciliation to succeed, the sum of balances from your selected ledger accounts must match the balance from your cash pool. When balances don’t match, the service reports drift - discrepancies between expected and actual balances, showing the exact amount of difference by currency.

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Capabilities

Formance Reconciliation provides comprehensive capabilities for financial tracking and compliance:

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Ledger-to-Bank Balance Matching

You can reconcile the balances of specific ledger accounts in Formance with their corresponding balances in external financial institutions (e.g., PSPs like Stripe or bank accounts). This ensures that recorded transactions align with actual fund movements.

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Automated Reconciliation & Reporting

During implementation, you define detailed reconciliation policies and generate custom reports based on your needs. This includes handling bi-temporality of funds (e.g., distinguishing between transaction timestamps vs. settlement dates).

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Compliance & Financial Oversight

By maintaining an accurate reconciliation process, you can:
  • Detect discrepancies between your ledger and external accounts
  • Streamline audits with comprehensive reconciliation history
  • Ensure regulatory compliance in your fund flows
This structured approach ensures that you can effectively track, validate, and report on fund movements while maintaining operational control.

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Use Cases

Reconciliation can be a great fit if you are building:
  • A marketplace where you need to keep track of the transactions happening in your system
  • A system that needs to keep track of the transactions happening across multiple cash pools
  • A system with complex money flows spanning across multiple accounts, providers or countries

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Getting help

Need help or have a technical question that isn’t covered in our docs? Check out our GitHub Discussions to ask questions and get help from the Formance team and community.