Guide
Reading a settlement statement: tie every line to the deposit
The deposit is smaller than the invoices. Somewhere between the two numbers is a statement. Most people look at the bottom line only.
In short
- A settlement statement lists what was billed, what was taken out and what was paid for a batch of loads. It can come from a factor or a broker. It is also called a remittance.
- Read it top to bottom: billed, fees, short pay, chargebacks, reserve, net.
- Tie the net to the bank deposit. If they differ, the difference is the question to ask.
- Held money, such as a reserve, is not lost. Put its release date in your calendar.
Hook. In the example batch, the take-home on deposit day is 84.0% of what was billed. The costs are 6.0%. The rest, 10%, is held and comes back later.
One batch, four kinds of lines
A statement mixes money in, money out and money held. Sorting each line into one of these makes it readable. Billed is the invoices in the batch. Costs are fees and deductions. Held is money that comes back later. Net is what hit the bank.
The figure shows one batch as a stack. Billed on the left, then the part taken as costs, the part held and the deposit. The bars are drawn to scale from the example below.
Check every costs line against a document: the fee schedule for fees, the rate con for a short pay, the claim letter for a chargeback. A line with no document behind it is a question. Our factoring cost tool prices the fee side.
Reconcile a statement in five steps
Match the batch
Check that every load number on the statement is one you billed, and none is missing.
Sort the lines
Mark each line as billed, cost, held or net.
Document each cost
Find the fee schedule, rate con line or claim notice behind it.
Tie net to bank
Net on the statement should equal the deposit. Note any difference.
Calendar the held money
Write the release date for any reserve, or the question if no date is shown.
What each line is and what to check it against
| Line | What it usually is | Check against |
|---|---|---|
| Billed total | Sum of invoices in the batch | Your invoice list |
| Fee | A percent or a flat fee for the service | Your agreement or fee schedule |
| Short pay | Less paid on a load than billed | Rate con, short pay guide |
| Chargeback | Money taken back after a claim or dispute | The claim notice, claim checklist |
| Reserve | Part held back and released later | Your agreement, release terms |
| Net deposit | What is paid out for the batch | Bank statement |
Worked example EXAMPLE VALUES
Example data. A batch of 5 invoiced loads, a 3% fee, a $15 wire fee, one short pay of $150 (a detention line left off), one $200 deduction and a 10% reserve. All figures are invented.
| Line | Amount | Note |
|---|---|---|
| Billed, 5 loads | $12,100 | $2,400 + $2,150 + $2,980 + $1,900 + $2,670 |
| Fee, 3% | -$363 | 3% of billed |
| Wire fee | -$15 | flat |
| Short pay, load 3 | -$150 | Detention not paid, to dispute |
| Deduction | -$200 | Needs a claim notice |
| Reserve held, 10% | -$1,210 | Released later |
| Net deposit | $10,162 | Should match the bank |
The costs add up to $728, which is 6.0% of billed. The $1,210 reserve returns later, so the batch ends near 94.0% of billed if the short pay and deduction are not recovered. The two lines to chase are the $150 and the $200. Nothing else needs action.
Where it goes wrong
- Reading the bottom line only. A correct total can hide a wrong line that cancels another.
- Treating the reserve as a cost. It is held. It becomes a cost only if it never returns, so track it.
- No document for a deduction. Ask for the load number and the reason in writing.
- Filing the statement unread. Save it with the batch folder and tick the lines off.
The formulas
Your statement may use other names for these lines. Match by meaning.
Terms differ
Fees, reserve and release dates come from your own agreement, and we do not know it. The percentages here are invented. Read your contract and ask the sender about any line you cannot match.
We do not give legal, tax or financial advice. Your contracts come first.
Questions
Is a settlement the same as a remittance advice?
Often close. Both explain a payment. Names vary by sender. See the glossary.
The net does not match my bank. Now what?
Look for a fee taken at the bank, a split payment or a timing difference. Then ask the sender for the payment reference.
How do I dispute a short pay line?
Send the rate con line and proof, such as times for detention, with the load number. See short pay guide.
When does the reserve come back?
It depends on your agreement. Check it, then calendar the date.
Related: short pay and chargebacks, rate con vs invoice, factoring vs direct billing, glossary, all guides.
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