# Merchant settlement exception records | SourceX

Canonical: https://refer.sourcex.si/guides/workflow-merchant-settlement-reconciliation
Last updated: 2026-10-19

The merchant settlement reconciliation records that explain an exception are the ones that show four things together: the amount the ledger expected, the amount the processor actually settled, the reason for the gap and the person who approved the fix. In practice that means processor batch and settlement files, bank payout records, the ledger journals they were matched against, the reconciliation workpaper and the adjustment log with its approver. A batch file alone shows only what settled.

## What makes a settlement exception explainable

Settlement reconciliation is the daily or weekly job of proving that what the processor paid out equals what the business sold, minus refunds, chargebacks and fees. Most days it ties. The useful history is the days it did not, and whether a finance team can still show why.

An exception is explainable when its records carry shared references. A refund ID, a batch number or a payout ID has to appear on both the processor side and the ledger side, or the gap can be described but not traced. Processor reports are built around these keys. Adyen's settlement details report lists each settled transaction with a PSP reference, a merchant reference and a batch number, and records refunds and chargebacks as debits. Stripe documents that a payout ID can be passed to a balance transaction request to return only the transactions behind that payout, and that its payout reconciliation report matches bank payouts to the batch of transactions behind each one.

The most common culprit is timing: a transaction that the ledger and the processor assign to different days. Fees, chargebacks, manual payouts and partial refunds produce the rest.

## Worked example: the refund that missed the 23:00 cutoff

Illustrative. A 340-person subscription software merchant settles card payments with one processor, whose daily batch closes at 23:00.

| Step | Time | Record | What it shows |
|---|---|---|---|
| 1. Refund issued | Day 1, 23:40 | Processor transaction log | A $1,240 refund, 40 minutes after the batch closed |
| 2. Ledger posts it | Day 1 | ERP journal from the billing system | Refund booked on the day it was requested |
| 3. Batch 0412 settles | Day 2 | Settlement file, batch 0412 | Day 1 sales with no refund in them |
| 4. Variance opens | Day 2 | Reconciliation workpaper | Payout is $1,240 higher than the ledger expected |
| 5. Batch 0413 settles | Day 3 | Settlement file, batch 0413 | The refund appears as a debit in the next batch |
| 6. Adjustment approved | Day 3 | Adjustment log with approver | Timing difference tied to the refund ID; variance closed |

What makes this a usable record is not the money. It is the labeled sequence: an initial problem (a $1,240 variance), an authorized action (a timing adjustment approved by the controller with the refund ID attached) and a checked result (batch 0413 confirms the debit, and the variance returns to $0).

## Each record, what it proves and where it usually breaks

| Record | What it proves | Common gap |
|---|---|---|
| Processor transaction log | When each sale, refund or chargeback happened | Timestamps in the processor's time zone, not the ledger's |
| Settlement file per batch | Which transactions settled together, with fees and debits | Older files only in the processor portal |
| Bank payout record | The amount that actually arrived | Manual payouts with no batch link |
| Ledger journal | What the business expected, and when it booked it | Summarized postings with no transaction reference |
| Reconciliation workpaper | The variance, its size and the date it opened | Overwritten each period instead of kept |
| Adjustment log | The reason, the approver and the reference that closed it | Free-text reasons with no ID attached |

The manual payout gap is documented, not hypothetical. Stripe states that its payout reconciliation report works only with automatic payouts and excludes manual payouts, because it cannot determine which transactions correlate to them. A merchant that used manual payouts for part of its history will have exceptions that its own team explained by hand, which makes the adjustment log the record that matters. For the wider case for reconciliation exceptions as training material, see [reconciliation exceptions as AI agent training data](/data-types/reconciliation-exceptions-ai-agent-training-data), and for the ledger side, [general ledger reconciliation](/resources/mcp/mcp-general-ledger-reconciliation).

## Ask the payments operations director about coverage and rights

The payments operations director or controller knows which processors, which years, where workpapers and adjustment logs are kept, and who approved adjustments. Ask for metadata only: record classes, years, volumes of exceptions, systems and owners. Never request settlement files, statements or screenshots.

Cardholder data stays out entirely. Even processors move it only under strict controls; Stripe's documentation, for example, says that when a merchant changes processors it sends card data only to a PCI DSS Level 1 compliant processor. Financing arrangements can also restrict a merchant's assets and records; [merchant cash advance and UCC lien restrictions](/questions/merchant-cash-advance-ucc-lien-restrictions) explains when to flag that.

The company needs 50+ full-time employees at peak (contractors do not count), a documented operating history, rights to license the records and an authorized contact. Companies in the U.S., Canada and the EU qualify, as do companies in the UK, Australia, New Zealand, India, Singapore, South Africa, Latin America, the UAE and Saudi Arabia when at least 90% of the data is in English. What stays unknown until SourceX reviews it: buyer interest in settlement exceptions (see [how AI labs buy data](/questions/how-do-ai-labs-buy-data)), how the processor agreement affects rights (see [why data rights matter](/proof/why-data-rights-matter)), how much preparation the set needs, and whether there is an offer at all. Sign the Channel Partner Agreement before you submit. The first valid introduction within the 90-day window is credited when the company submits a verified application. Other payments and retail workflows are listed under the [industries hub](/industries) and the [e-commerce page](/industries/ecommerce).

## Go deeper on merchant settlement reconciliation

- [Merchant settlement records across systems](/guides/merchant-settlement-reconciliation-records-across-systems): a system map of the processor, bank, ledger and reconciliation tool, and the keys that join one exception.
- [Who can license merchant settlement records](/questions/who-can-license-merchant-settlement-reconciliation-records): a decision tree for record ownership, processor terms and who can authorize a licensing discussion.
- [Preserve merchant settlement records before a processor migration](/guides/preserve-merchant-settlement-reconciliation-records): a retention timeline of what to keep before a processor change and who must approve keeping it.
- [Merchant settlement reconciliation referral brief template](/resources/merchant-settlement-reconciliation-referral-brief-template): a metadata-only brief to fill in before an introduction, with one completed Illustrative example.

## Next step

> **Refer a company. Earn up to $100,000.** Default reward: 25% of Actual Supplier Payout, capped at $100,000 cumulatively per referred company. Eligibility and payment conditions apply, and a signed Schedule A or addendum can differ. A lead, meeting or signature alone does not trigger payment.

If a merchant client can still trace its settlement exceptions from batch to payout to approved adjustment, [register as a partner](/register), check the company against [who qualifies](/who-qualifies), and read the [program terms](/terms) before you send the note.

## Sources

- https://docs.stripe.com/reports/report-types/payout-reconciliation
- https://docs.stripe.com/payouts/reconciliation
- https://docs.adyen.com/reporting/settlement-reconciliation/transaction-level/settlement-details-report
- https://docs.stripe.com/get-started/data-migrations/pan-export
- https://refer.sourcex.si/terms