Why bank reconciliation does not add up at a Mexican company

It is day 4 of the close. The treasurer has the bank statement open; the controller, the customer subledger; the invoicing team, the month's list of CFDI (Comprobante Fiscal Digital por Internet, Mexico's electronic tax invoice). The three documents describe the same money and none of them matches the other two. Someone opens an Excel sheet, pastes in the three columns and starts looking for which invoice each deposit belongs to. Two days later the sheet balances, or balances "almost," and the close is signed off with an "unidentified" line. (Illustrative scene; it does not describe a real company or a real close.)

If you run finance, are a controller or manage the treasury of a Mexican company, you probably recognize the scene. And you have probably wondered why, with digital banks, mandatory electronic invoicing and modern accounting systems, bank reconciliation can still be a manual job that takes several days.

This article explains why it does not add up, with the rules of the SAT (Servicio de Administración Tributaria, Mexico's tax authority) open at the source, not from memory. It does so in five steps:

1. What reconciling actually is in Mexico, and why it is more than comparing balances.
2. The eight causes for which a deposit does not find its invoice.
3. A worked example with illustrative figures, from a fictitious company, to see each cause with numbers.
4. What it costs to do it by hand at each close, and how to calculate it in your company.
5. What changes when it is automated, and what does not.

This article complements the one on Payment complement and cancellations: where the SAT finds the mismatch, which explains in detail the fifth-day deadline and the rules for canceling a payment complement. We do not repeat that here: we start from there and deal with the earlier question, the one that makes it hard, which is knowing which invoice a deposit belongs to.

Notice. This text explains public rules of the SAT and of the Federal Tax Code for informational purposes. It is not personalized tax advice. The treatment of each case, including the assumptions of your company, is validated by your accountant.

Reconciling in Mexico is not the same as reconciling in another country

In many countries, reconciling means comparing two lists: what the bank says and what the ledger says. If the bank balance plus the items in transit equals the ledger balance, it closes. In Mexico that comparison exists and is necessary, but it comes late, because between the deposit and the ledger there is a third actor with rules of its own: the SAT.

When a company sells on credit, the money and the tax document travel along separate paths. The Federal Tax Code (Código Fiscal de la Federación, CFF), in its article 29-A, section VII, subsection b), describes it this way: when the consideration is not paid in a single installment, or is paid in a single installment but deferred with respect to the moment the receipt covering the total value of the transaction is issued, one receipt is issued for the total value of the transaction and, afterwards, one receipt for each of the remaining payments received, which must state the folio of the receipt issued for the total [1].

Put in practical terms, a credit sale produces at least three traces:

• The invoice, for the total value, which carries in the payment method field the key PPD (pago en parcialidades o diferido, payment in installments or deferred), as opposed to PUE (pago en una sola exhibición, payment in a single installment).
• One or several deposits at the bank, with their date, their amount and a reference that the customer wrote however they pleased.
• A payment CFDI (the "electronic payment receipt," which carries the Complemento para recepción de pagos, the payment-receipt complement) for each collection, or one that groups a month's payments from the same recipient, according to rule 2.7.1.32 [2].

Reconciling, then, is solving an equation with three terms: the deposit, the invoice it settles and the complement that documents it. And that equation does not hold by itself. It holds if someone (or something) knows which invoice the deposit belongs to, on the same day it came in, or as close to it as possible.

Why the SAT starts the clock in your treasury

The completion guide that the SAT publishes for this complement answers the question of the deadline in its frequently-asked-questions appendix: the CFDI with the payment-receipt complement is issued no later than the fifth calendar day of the month following the one in which the payment was received, and the guide itself explains that, since the data is an input for determining VAT, a deadline similar to that of the filing for that tax was considered [3]. That deadline, and the fact that it is calendar and not business days, we already covered in the related article.

What matters here is an operational consequence: the deadline is tied to the month to which the payments received correspond, not to the moment someone in your company identifies them. The same guide specifies that the payment date recorded is the date the payment was received (for example, that of a check is recorded on the day it is received, even if the deposit shows up the next day) and that payment documents are not issued on the basis of a promise of payment or with a future date [3]. For transfers, that date is checked against the applicable bank record. If identifying the deposit takes a week, that week has already run off the deadline without anyone having issued anything.

There is also a deeper reason to take the matter seriously. The same guide indicates, in its question 14, that in an installment or deferred-payment transaction the electronic payment receipt is a requirement for being able to credit the transferred taxes and, where applicable, to deduct, on the basis of articles 29 and 29-A of the CFF, 27 section III and 147 section IV of the LISR (income tax law) and 5 section II of the LIVA (value-added tax law) [3]. That is, timely identification of a collection has an effect on the customer who paid you, not only on you. Your accountant will know how it applies to your case. Our part is the operational side: that effect depends on a job that, in many companies, is done today in Excel.

The eight reasons a deposit does not find its invoice

A manual reconciliation does not fail for lack of effort. It fails because there are at least eight frequent causes (not exhaustive) for which a deposit and an invoice stop being equal, and several of them respond to a legitimate operation. Here they are, with the rule that produces each one.

1. The customer pays an installment, not the whole invoice

The completion guide requires that each payment applied to an invoice record the installment number, the previous balance, the amount paid and the outstanding balance. The previous balance is the outstanding balance of the previous installment; in the first installment, the total amount of the related document. The outstanding balance is the difference between the previous balance and the payment, must be greater than or equal to zero and is calculated as previous balance minus amount paid [3].

For example, an invoice for 232,000 pesos that receives a first payment of 100,000 is left with an outstanding balance of 132,000. If the second payment comes in with a reference that says only "payment," the second complement still depends on someone remembering that the previous balance is no longer 232,000 but 132,000. A spreadsheet does not remember; the person who did remember went on vacation.

2. A single deposit settles several invoices

The customer bundles three invoices and makes a single transfer. The guide resolves it this way: a single payment that settles several invoices requires one CFDI with a payments complement, with the references (UUID) of all the invoices it settles [3]. The bank shows one line; for tax purposes there are three related documents. Finding the exact combination of invoices that adds up to that amount is a subset problem, which by hand is solved by trial and error.

3. One invoice is paid with several deposits, or several deposits are grouped into a single complement

Rule 2.7.1.32 allows issuing one payment CFDI for each payment received or one for all of a month's payments, provided they correspond to the same recipient [2]. The guide adds that when ten payments are grouped, the CFDI carries ten "Payment" sections and the related documents that are required [3]. Grouping saves stamps, but it requires having the payments sorted by recipient and by month before the fifth day.

4. The credit note changes the balance without any money coming in

A return, a discount or a rebate is documented with an expense-type CFDI (egreso, the "credit note"). The guide is explicit: that egreso CFDI is applied directly to the originating CFDI to which it is related, and a CFDI with a payments complement must not be issued to try to apply the return, discount or rebate with it [3].

This breaks a very common intuition in treasury: the customer paid us "what they owed," but what they owed is no longer what the invoice says. The deposit is lower than the invoice and the difference is neither an error nor a pending payment; it is a credit note that leaves no trace at the bank. If the accounting assistant did not apply it before reconciling, the invoice appears half paid.

5. The fee is deducted before the money arrives

Collections through a card terminal or a payment processor may arrive net of the fee, grouped by day or by batch, depending on the contract and on the intermediary's report. Then the deposit is equal to no single sale; it is the sum of several sales minus the fee and its VAT. To reconcile you need the settlement report, the CFDI of the sales involved and the intermediary's receipt for the charge or fee, and the fee must be recorded in your expense account. On its tax treatment, your accountant decides; for reconciliation what matters is that it exists and that it must be explained.

6. The customer deducts something, or pays from another account

It may be a withholding the customer applied, a bank fee they wanted to deduct in their favor, or the rounding of a system. The result is a deposit of 115,950 pesos against an invoice of 116,000. It is nobody's mistake, but the 50-peso difference has to end up somewhere: either it is collected later or it is recorded under a criterion that your internal policy must have defined. Another variant: the payment arrives from a different legal entity, for example the customer's parent company. If the bank statement shows an ordering account that does not correspond to the invoice's customer, it is a signal to request commercial evidence and internal authorization before applying the payment; it is not, by itself, a tax rule of rejection. The guide allows the complement to record the bank details of the transaction, but for an electronic transfer recording them is optional [3].

7. The reference does not match, or does not exist

The completion guide defines that the payment's operation number can be the check number, the authorization number, the reference number, the tracking key in the case of SPEI (Mexico's interbank electronic payment system), a capture line or another similar piece of data that allows the operation to be identified [3]. That data exists at the bank. What does not exist is a universal discipline among customers to write the invoice folio in the transfer's concept field. In practice, the reference arrives as "PAYMENT," "BALANCE," a person's name or blank.

8. Currency and exchange rate

If the payment's currency differs from the currency of the related document, the complement must express the document's currency, the amount paid in that currency and the applicable equivalence; the guide admits up to ten decimals in the equivalence [3]. If the payment is in pesos, the payment's exchange rate is recorded as 1 [3]. The bank shows its own amount and its own currency; reconstructing the tax relationship requires reviewing the deposit and the invoice together, and it is an additional calculation for each movement.

Summary

A worked example, with illustrative figures

Example. Everything that follows is fictitious: an invented company, "Distribuidora Ejemplo del Bajío," and illustrative figures that do not correspond to any customer or any measurement. They serve to see how the eight causes behave in a small month.

Distribuidora Ejemplo del Bajío sells on credit and collects by transfer and by card terminal. In October (example) it has accounts receivable with six customers and receives nine movements on its bank statement. It closes the month on November 4. The October payment complements must be issued no later than November 5, the fifth calendar day of the following month.

Invoices open at the start of October (PPD, with 16% VAT):

Customer F returned merchandise and was issued an egreso CFDI for 17,400.00 applied to F-1007; its current balance is 156,600.00.

What the bank statement shows in October:

How each movement is resolved: (additional assumption of the example: the terminal sales were invoiced at the time of collection, in a single installment, and are not part of the accounts receivable in the first table; the settlement is used here only for the bank reconciliation and does not by itself represent a payments complement).

Arithmetic check: the nine movements add up to 868,430.00. Of them, seven are identified with explicit rules (reference, exact amount against open balance, sum of invoices, applied credit note and fee); one of those seven, movement 2, leaves a difference of 50.00 that must be treated according to your authorized policy; and two require documentary investigation before being assigned: one because of an ordering account that does not correspond to the customer (data that appears in the detail of the movement, not in the summary table) and another because there is no invoice. The usefulness of a process like this is not in guessing, but in separating identification, exception and decision.

Now the complements part. With the seven movements identified, the following remain to be issued before November 5:

If movement 8 is cleared up on November 6, D's complement deadline has already passed. And if 9 is in fact an advance from a customer, its treatment has rules of its own: the guide refers to Annex 20 and its completion guide for the procedure in the case of advances received [3]. The absence of an open invoice does not by itself turn a deposit into an advance: it is first classified with the commercial evidence of the transaction. In both cases, your accountant decides how it is documented; what the example shows is that the hard part was not stamping, but knowing in time what each deposit was.

What it costs to do it by hand

There is no reliable public figure for the average cost of reconciling at a Mexican company, and that is why this article does not invent one. What it can do is give you the formula to calculate yours, with a sample from your own close.

Monthly cost of manual work = movements that require human work × minutes per movement × cost per minute of the team that does it.

An example with illustrative numbers (assumptions, not measurements): a company with 1,200 bank movements a month, of which 30% do not reconcile with a trivial match. That is 360 movements. If each takes 6 minutes between finding the invoice, confirming the balance and noting it down, that is 2,160 minutes, 36 hours a month and 432 a year, from a profile that the rest of the month does closings, reviews risks and analyzes cash flow. Replace the assumptions with your own.

But the cost in hours is the smallest. There are four costs that do not appear on the sheet:

1. The cost of the date. The accounting close waits for the reconciliation, and the reports that leadership reads depend on the close. Each day of delay is a day on which decisions are made with old information.
2. The cost of the complement deadline. A deposit identified on day 6 can mean a complement outside the fifth calendar day. The text of the SAT guide warns in a note that whoever receives the payment and does not issue the complement by that date, or issues it afterwards, could incur the infraction of section VII of article 83 of the CFF, with a fine under section IV of article 84 [3]. We give no amounts because we did not verify them for your case; your tax advisor can give you the applicable figure.
3. The cost of depending on people. When the knowledge of "which customer pays in odd ways" lives in one person's head, that person's absence holds up the close.
4. The cost of the "unidentified" line. A balance with no owner is carried forward month after month, and becomes harder to clear with each month that passes.

The typical errors of the spreadsheet

Excel can be very useful for analysis and can prove insufficient when the process demands traceability among payments, CFDI and balances. The failures that repeat have a known shape:

• Versions. Two people work on two copies of the same file and one overwrites the other.
• Formulas broken by inserted rows. A range that no longer covers the last row.
• Matches by amount. Two different invoices for the same amount and a deposit assigned to the wrong one.
• Balances carried forward by hand. Installment 3 is calculated with the balance of a month that was no longer the right one.
• Memory. What was applied, what was canceled, what is missing.

None is a capacity error. They are errors of having a process with many rules and many documents living in a place with no rules and no documents.

What changes when it is automated

Automating bank reconciliation does not mean human judgment disappears. It means judgment is used where it is needed. Five things change.

1. The starting point stops being the deposit and becomes the document. Instead of asking "whose deposit is this?", the process starts from what is already known: the open invoices, their balances and their current complements. That information is at the SAT (each CFDI, with its status) and in the company's systems.

2. The rules are written once and applied to all movements. Match by folio, by tracking key, by exact amount against an open balance, by sum of invoices of the same customer, by invoice minus credit note, by terminal settlement minus fee. They are the same ones the person applied from memory, but explicit, reviewable and auditable.

3. Exceptions are separated out. From the earlier example: seven of nine movements with a rule, two for review. In a real operation that proportion changes with the business; what holds is the idea that the person reviews exceptions, not the whole universe.

4. The balance lives in one place. Previous balance, amount paid and outstanding balance stop being calculated by hand at each installment. They are calculated from the history of payments applied to the invoice.

5. The status of each CFDI becomes visible. A canceled invoice, a complement in the process of cancellation or a substituted receipt change the picture, and the related article explains why. Having the status next to the bank movement helps flag canceled or substituted documents before the review.

What automation does not do

For this section to be useful, it is also worth saying what should not be expected:

• It does not replace tax judgment. Whether a deposit is an advance, the payment of an invoice or a refund from a third party is determined by your policy and validated by your accountant.
• It does not fix data quality. If the transfer's reference is empty, the flow treats the missing reference as an exception and asks for human review; it proposes candidates and the rules explain them. A good process reduces the work; it does not eliminate the exception.
• It does not promise a percentage of automatic reconciliation. It depends on how your customers pay, how you invoice and the information from the bank. A figure without your bank statement in front of you is an assumption.
• It does not change the SAT's rules. The rules of the RMF (Resolución Miscelánea Fiscal, the annual miscellaneous tax ruling) are modified during the year; the process must be reviewed when they change.

Five questions for your next close committee

1. How many deposits last month were identified after the fifth calendar day of the following month, and for what amount? If putting the answer together takes days, you already have an answer.
2. How many movements had to be reconciled with a person searching in Excel, and how many minutes does each take on average, according to your own team?
3. What is your policy for small differences (for example, 50 pesos of fee that the customer deducted)? Who authorizes them and where is the record kept?
4. Are your credit notes applied to the originating invoice before reconciling, or after?
5. Which "unidentified" line has been open the longest, and who is responsible for it today?

If two or more answers are "I don't know," it makes sense to measure first. The first measurement can be done without starting a technology implementation: all it takes is a sample.

Where to start this week

Take one closed month. Extract the bank statement, the list of income CFDI issued and the list of payment complements for that month. Pick twenty movements at random, not the easiest ones. For each one, note three pieces of data: which invoice it belonged to, how long it took someone to know, and whether the complement was issued within the deadline.

With that you get three numbers of your own: the percentage of movements that were identified with a simple rule, the average time of those that were not, and how many went past the fifth day. Twenty items do not give you a reliable percentage for the whole company, but they do show you where the thread is lost, which in many companies is in the same two or three causes of the eight.

What Hábil does

Cuadre is Hábil's piece for this part of the problem. It brings in and organizes your company's CFDI from the SAT, and reconciles payments against invoices: it takes the movements from your bank statement and cross-matches them with the open invoices, their balances and their complements, applying rules like those in this article's example (reference, amount against balance, several invoices in one payment, credit note, fee) and leaving the exceptions visible so that your team can resolve them before the close.

The scope of the sources, the rules and the results is defined with you before starting, and it depends on the quality and availability of your data and of the bank statement you share. Cuadre does not replace your accountant or your close policy; it organizes them. And if your operation includes several collection and invoicing systems, the page Unify your operations and your channels explains how we join them without replacing them.

Get to know Cuadre at habil.mx/en/cuadre.

First conversation, at no cost. Its goal is to leave you with the map of your integrations and the points where money, time or evidence is probably being lost in your close. Write to us on WhatsApp.