Reconciling at Scale: Why Manual Bank Matching Breaks for Digital NBFCs

The Structural Problem with Reconciliation

For most NBFCs, reconciliation is not difficult because it is manual.
It is difficult because the book view and the bank view speak different languages.

A modern digital lender processes thousands—sometimes millions—of small-ticket repayments every day. These payments arrive through multiple rails: UPI, NACH, cash deposits, wallets, and payment gateways.

Your LMS records these as individual borrower-level credits.
Your bank statement records them as aggregated settlements.

The mismatch is not accidental. It is structural.

Yet most reconciliation workflows still rely on spreadsheets and one-to-one matching logic—tools designed for a world where every invoice had a corresponding bank entry.

That world no longer exists.

The N-to-1 Reality of Payment Gateway Settlements

One of the clearest illustrations of this mismatch is payment gateway reconciliation.

Consider a routine scenario:

• 235 borrowers repay their EMIs through a payment gateway on a single day.
• Your LMS records 235 individual repayment entries, totaling ₹2,65,432.
• The gateway deducts its fee (say ₹2,654.32) and transfers the net amount.
• Your bank statement shows one credit: ₹2,62,777.68.

From a finance perspective, nothing is wrong.

From a traditional reconciliation tool’s perspective, everything is.

Trying to manually prove that:

Total Repayments – Gateway Fee = Bank Settlement

across hundreds of entries is time-consuming, error-prone, and unsustainable at scale.

Encore’s Approach: Model the Reality, Not the Exception

Encore Lend’s Bank Reconciliation module is designed around how digital money actually moves—not how legacy systems expect it to.

1. Native N-to-1 and Many-to-Many Matching

Encore allows finance teams to reconcile:

• Multiple repayment credits and
• Associated fee or charge vouchers

against a single bank settlement entry in one governed action.

The system validates the arithmetic automatically and records the reconciliation as a single, auditable event—without manual calculators or spreadsheet glue.

This keeps:

• Loan sub-ledgers
• Fee accounts
• Bank balances

in consistent alignment.

2. Partial Reconciliation Without Losing Control

In real operations, not every discrepancy can be resolved immediately.

A settlement may be short because:

• One repayment failed late
• A charge voucher is pending
• A reversal is still in transit

Rigid systems force teams to abandon the entire batch.

Encore supports partial reconciliation, allowing teams to:

• Lock in what is verified
• Clearly isolate what is pending
• Complete the reconciliation when missing entries are resolved

Nothing is overwritten. Nothing is forgotten.

3. Automatic Matching Where Precision Exists

Not every transaction needs human attention.

For standard rails like NEFT or RTGS—where references align cleanly—Encore automatically matches book and bank entries upon statement upload.

This clears high-confidence volume upfront and ensures that finance teams spend time only on genuine exceptions.

4. Reversal-Aware by Design

Failed transactions and reversals are inevitable in high-volume payment systems.

Encore identifies and pairs original entries with their reversals automatically, preventing:

• Inflated suspense balances
• Artificial unreconciled noise
• Manual “clean-up” adjustments

The result is a cleaner ledger and clearer exception reporting.

What Finance Teams Actually Get

By treating reconciliation as a first-class accounting workflow—not an afterthought—Encore delivers:

• Clear Unreconciled Reports
  Focused lists of exactly what needs investigation.

• Audit-Ready Trails
  Every reconciliation action is traceable: who matched, when, and why.

• Faster Period Closures
  Daily reconciliation becomes realistic, not aspirational.

Conclusion: Reconciliation as Control, Not Cleanup

Reconciliation should not be a month-end firefight.
It should be a continuous confirmation that your books reflect reality.

Encore Lend removes the mechanical burden of matching while strengthening financial control—allowing NBFCs to scale transaction volume without scaling reconciliation risk.

Still closing your books with spreadsheets and crossed fingers?
Book a Demo to see how Encore Lend brings structure and certainty to high-volume reconciliation.