A reconciliation break is a discrepancy that appears when two records of the same activity are compared and do not agree. In payments the comparison is usually between a company's internal ledger and an external source, such as a bank statement, a processor's settlement file or a card network report. A break may be an item present on one side only, known as an unmatched transaction, or an item on both sides with a different amount, date or reference.
Common causes are timing differences, where a payment is recorded one day and settles the next, fees or foreign exchange deducted from the amount received, duplicate postings, returned or reversed payments, and missing references. In reconciliation work each break is logged, given an owner and aged, since old open items can hide losses or errors in customer balances. Regulated firms that hold client money are expected to investigate and resolve breaks promptly and to fund any shortfall.