Learn / Reconciliation
Not every dollar in your bank account is a sale. How to sort deposits into real receipts, with a worked month.
A reconciliation is only as good as the number you start with. If you count every deposit as sales, you can end up paying a share of money that was never a sale. The first step is sorting your deposits.
Your MCA contract says the funder bought a percentage of your "receipts" or "receivables" or "future sales." Those words are defined, usually near the start of the agreement. The payment you owe under reconciliation is that percentage of the defined receipts, not of everything that lands in your bank account.
Funders often work from bank deposits because deposits are easy to see. That is a shortcut. It is fine when your deposits are nearly all sales. It gets expensive when they are not.
In short, money a customer paid you for what you sell. Some contracts also pull in sales tax collected or tips. Read your definition.
"Usually" matters. Some contracts count more, some less. If the definition is unclear, ask the funder how it defines receipts, in writing.
Here is one month of deposits for a made-up business. The mix is an example, not a typical month.
Now sort them. Three lines are sales. One returned check comes off. The rest are not sales. The specified percentage in this example is 15%.
The deposits total $80,800, but real sales are $58,350. If the funder applies the percentage to deposits, the debit for the month is $3,367.50 higher than the contract allows in this example. That is the kind of gap a reconciliation request can point to, using the contract's own definition. It does not decide the outcome. The funder reviews it under the contract.
The sorting above is general. Your agreement is specific. Look for these words and write down how each is defined:
If the contract says the funder will use "deposits," then deposits may be the number. If it says "receipts" and defines them, the definition rules. For a walkthrough, see Reading your MCA contract.
If you collect sales tax or tips and they pass through your account, ask whether your contract counts them. Some definitions say gross sales including tax. Others say net. A few percent of sales can sit in that one word.
A card sale on the last day of a month may land in your account on the first days of the next. If you reconcile by month, use the same rule for every month, and say which rule you used. Mixing rules can create a gap that is not real.
If you own more than one company, money moving between them is a transfer, not a sale, unless one is really buying from the other. Keep a short note for each such deposit.
If personal money goes through the account the funder debits, your deposits will include non-sales. Cleaner records make the sorting easier, and they also make a reconciliation request easier to support.
A little habit saves hours later. Each month, keep a one-page sheet that lists every deposit that is not a plain customer payment, with the date, the amount and a few words on where it came from. Save the loan agreement or the transfer confirmation next to it. If you ever send a reconciliation request, this sheet is the backbone of it, and the funder can check it against your statements.
Also keep your card processor statements. Processor reports often show gross sales, fees, refunds and chargebacks on one page, which is useful if your contract counts receipts before processing fees. Whichever way your contract counts, use that way every month.
Our guide to how reconciliation works and the request letter explain what to do with the result. Do not stop, block or reverse payments on your own. If you have a default notice, a lawsuit or a lien notice, talk to a lawyer licensed in your state. This is education, not legal or tax advice.
Connect your bank (read-only) and add your agreements. Your reconciliation report is usually ready the same business day.
Check my MCA →Education only, not legal advice. Agreements differ; your contract's exact wording controls.