> For the complete documentation index, see [llms.txt](https://docs.ledge.co/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ledge.co/reconciliation/overview.md).

# Overview

Reconciliation is the process of verifying that all expected transactions have been accounted for through one or more Payment Flows. While the **Payment Flow score** is a key metric, it is not always sufficient to determine if a transaction is fully reconciled. In some scenarios, multiple Payment Flows may need to be considered to achieve a comprehensive reconciliation.

A transaction is considered **reconciled** when one or more Payment Flows associated with it result in a satisfactory explanation of the total expected amount. By default, if a transaction achieves a **score of 1** in at least one Payment Flow, it is considered reconciled.

A transaction is considered partially reconciled if the underlying Payment Flows were satisfied with a score that is lower than 1. This means that only a part of the amount is explained.

By default, if a transaction receives a score that is greater than zero in at least one Payment Flow, it is automatically marked as **reconciled**.

### **Types of Reconciliation Scenarios**

#### **Single-Flow Reconciliation**

In simple cases, reconciliation can be achieved through a single Payment Flow. If the transaction receives a **Payment Flow score of 1**, it is automatically considered reconciled.

**Example:**

A payment is initiated and settled successfully, with no fees or other flows involved. This one-to-one relationship allows for reconciliation via a single Payment Flow.

#### **Multi-Flow Reconciliation**

More complex cases may require multiple Payment Flows to be satisfied for the transaction to be considered reconciled.

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**Examples**

* **Scenario 1: ACH Payment with Multiple Possible Flows -** An ACH transfer can either be **settled** or **returned**. Since only one of these flows is possible, the reconciliation must consider both flows. If the settlement occurs, the **settlement flow** score would be 1, and the reconciliation is achieved. If the transfer is returned, the **return flow** would be satisfied, and reconciliation would still be achieved. As long as one of these flows receives a score of 1, the transaction is considered reconciled.
* **Scenario 2: Payment with Fees and Taxes -** In cases where a payment involves **fees** or **taxes**, reconciliation requires multiple flows to explain the total amount: (1) Payment settlement, (2) Fee deduction, and (3) Tax collection. If the sum of these flows fully explains the expected amount, the reconciliation is achieved. This requires multiple Payment Flows working together to provide a complete explanation of the transaction.
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