> ## Documentation Index
> Fetch the complete documentation index at: https://docs.lead.bank/llms.txt
> Use this file to discover all available pages before exploring further.

# Reconciliation

> Network settlement reconciliation explained.

## Introduction

Subsequent to a given network settlement, Lead requires data to reconcile network activity, specifically, the transaction and refund amounts. As cardholders are Lead customers, Lead has the obligation to reconcile network activity against individual transaction activity to ensure both financial flows are balancing as well as comply with relevant regulations.

* **Debit/Prepaid BINs:** Lead-owned <Tooltip tip="For Benefit Of">FBOs</Tooltip> require Lead to collect and reconcile cashflows on a daily basis.
* **Credit BINs:** Credit cardholders are Lead borrowers and as a result, receivables must be originated at the cardholder level.

## Daily Reporting

Lead uses your Transaction files to reconcile activity against each day’s network settlement. This is done by using the `settlement_date` populated for every transaction with the transfer type of `card`.

However, reconciliation happens T+1 of network settlement, since network settlement windows generally do not align with Lead’s network windows. In other words, Lead uses two days worth of Transaction files in order to reconcile a given day’s network settlement.

**Example**

For a given network settlement on T, Lead uses the Transaction files delivered on T and T+1 to identify all of the transactions that reconcile to T’s network settlement.

| **File Date** | **Transaction ID** | **Amount** | **Settlement Date** |
| ------------- | ------------------ | ---------- | ------------------- |
| 10/12         | 102                | \$12.00    | 10/12               |
| 10/13         | 103                | \$14.00    | 10/12               |
| 10/13         | 104                | \$16.00    | 10/12               |
| 10/13         | 105                | \$18.00    | 10/13               |

Assume the first date the program is live is 10/12 and the current processing date is 10/13:

| **Network Settlement Date** | **Network Settlement Transaction Amount** | **Reconciled?**                                                                                                                                                                                  |
| --------------------------- | ----------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| 10/12                       | \$42                                      | **Yes:** On 10/13 - using the transactions from 10/13’s Transactions file, Lead can sum the three transactions with settlement date of 10/12 to reconcile to \$42 and continue with processing.  |
| 10/13                       | \$40                                      | **Not yet:** Since Lead doesn’t yet have the 10/14 Transaction file, there is only a partial dataset for 10/13’s network settlement where Lead only sees \$18 (of the \$40) from the 10/13 file. |

This is an important validation that will block subsequent days of daily reports (not the Network Settlement report) if reconciliation does not pass. In the example above:

<Warning>
  If a transaction from 10/12’s Transaction file is missing (e.g., Transaction 102), then the validation will fail on 10/13.\
  \
  **Remediation**: Roll back 10/12’s Transaction file and correcting the data, which is a manual and intensive process on the Lead side.
</Warning>

<Warning>
  If a transaction from 10/13’s Transaction file is missing (e.g., Transaction 103), then the validation will fail on 10/13.\
  \
  **Remediation:** Reupload an updated 10/13 Transaction file with the correct data.
</Warning>

<Note>
  The above example is only for Transaction amount; the same requirements apply for Refund amount. \
  \
  Interchange, disputes, and fees are exempt from reconciliation because Lead considers these corporate funds, meaning they do not impact the end customer’s ledger. \
  \
  Interchange and fees are items that are assessed to you per your contract, and disputes are typically held in a partner-owned account until the dispute is resolved.
</Note>

Reconciliation runs across each network and BIN type combination. This means if multiple BINs are debit/prepaid, then the network settlement report will display the combined totals, which our system will then reconcile against the appropriate transactions. The same is true for <Tooltip tip="Original Credit Transaction">OCT</Tooltip> and <Tooltip tip="Account Funding Transaction">AFT</Tooltip> transactions — Lead will run reconciliation on each network settlement file and reconcile the two amounts related to transaction spend:

| **Network Settlement Report Field On T** | **Issuing BIN (Debit/Prepaid/Credit)**                                                                                                  | **Acquiring BIN (Push-to-Card)**                                                                                                                                                            |
| ---------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| transaction\_amount                      | Sum of amount from transactions where type = debit and transfer\_type = card                                                            | Sum of amount from transactions where type = debit and transfer\_type = <Tooltip tip="Original Credit Transaction">oct</Tooltip>, <Tooltip tip="Account Funding Transaction">aft</Tooltip>  |
| refund\_amount                           | Sum of amount from transactions where type = credit and transfer\_type = card, <Tooltip tip="Original Credit Transaction">oct</Tooltip> | Sum of amount from transactions where type = credit and transfer\_type = <Tooltip tip="Original Credit Transaction">oct</Tooltip>, <Tooltip tip="Account Funding Transaction">aft</Tooltip> |