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Reconciliation tools that start matching without checking a statement is complete turn missing pages, date gaps and duplicate uploads into false exceptions and hide real ones.
Demand ingestion checks that prove each statement is whole before matching, and test them by breaking files on purpose during the demo.
Checks: running-balance chain per line, first and last date against the period, page or row gaps, duplicate lines across overlapping uploads, and file opening balance against the ledger opening balance.
A pass or fail per file with the exact line where the chain breaks, and failed files kept in the audit trail with a reason.
Before a reconciliation tool matches a single line, it should prove the statement is whole: opening balance plus credits minus debits equals the closing balance, there are no missing dates or pages, and no line has been loaded twice. If it skips this step, a missing page turns into dozens of false exceptions, and a duplicate week can hide a real one.
Format-specific issues are covered in scanned PDF vs machine-readable statements and the MT940 guide.
Which checks matter most?
- Running-balance chain: for each line, previous balance plus credit or minus debit should equal that line’s balance. The final figure must equal the printed closing balance.
- Period coverage: the first and last transaction dates should fall within the statement period, with no unexplained gap of days.
- Page or row gaps: for PDFs, every page should be read; page numbers such as 1 of 12 should run without a break.
- Duplicate lines: when two uploads overlap, the same line (date, amount, reference, balance) must be loaded once.
- Opening balance against the ledger: the file’s opening balance should equal last month’s closing balance in the books or the last signed reconciliation. The opening balance guide covers what to do when it does not.
MT940 files carry opening and closing balances in their own fields (tag 60F for the opening and 62F for the closing balance), so the tie-out is easy to check. PDFs, especially scanned ones, are where the chain most often breaks.
What should happen when a check fails?
The account should be flagged before matching. The tool should show the exact line where the chain breaks, not just a total difference. The failed file should stay in the audit trail with the reason, and a corrected file should be loaded as a new version. Keeping the failed version matters for audit: the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, in force from 1 April 2023, expects every change to be traceable, and Section 128(5) of the Companies Act, 2013 requires records to be kept for eight financial years. For a duplicate week, the tool should name the overlap, for example 46 lines worth ₹3,12,400 loaded twice for 8 to 14 August, and load them once. Nothing should be deleted silently, and matching on that account should wait until the file passes or a reviewer accepts the exception.
How do you break each check on purpose in a demo?
| Check | How to break it on purpose | Expected alert | Severity |
|---|---|---|---|
| Balance chain | Edit one line’s balance in a CSV | Chain break at that line | Blocks matching |
| Closing balance | Delete the last page of a PDF | Computed close differs from printed close | Blocks matching |
| Period coverage | Load a file covering 1 to 25 for a 1 to 31 period | Missing days flagged | Blocks matching |
| Page gap | Remove page 4 of 12 | Page gap flagged | Blocks matching |
| Duplicate lines | Load the same week twice | Duplicates flagged and loaded once | Warning |
| Opening balance | Use a file whose opening differs from last close | Difference shown by account | Warning |
What does a worked chain break look like?
A statement prints a closing balance of ₹7,42,180. Opening balance plus credits minus debits gives ₹7,24,180. The difference is ₹18,000, and because 18,000 divides exactly by 9 (to 2,000), the likely cause is two transposed digits, a common sign of a misread or re-keyed figure. Walking the running balance line by line, the chain breaks on one line where the balance reads ₹2,41,560 but the computation gives ₹2,23,560, so ₹18,000 is out of place from that line onward. The reviewer sees that line highlighted, checks it against the source page and corrects the extraction. Without the chain check, the ₹18,000 would appear as an unexplained difference at the end of the month.
How do these checks fit into your evaluation?
Add the broken files to your test pack and run them through every vendor. Lenders use the same arithmetic to screen borrower statements for tampering; for a finance team, the aim is simpler: no false exceptions, and no real ones hidden.
How Terra Insight fits
TransactIG delivers bank-to-books reconciliation with an exception queue and audit-ready exports. Bring your deliberately broken files to a representative-sample fit benchmark and see what each check reports. See the bank reconciliation software page.