Automatic invoice payment reconciliation - Karat Help Center

How automatic reconciliation works

When automatic reconciliation is enabled for a recipient:

1. Unique virtual account number: The recipient receives a unique account number for sending payments
2. Automatic payment matching: When payments are received to that account number, Karat automatically matches them to open invoices for that recipient
3. Invoice status updates: Invoices are automatically marked as “paid” when matching payments are received
4. Email notifications: You receive email notifications when payments are received or when payment matching needs your attention

Enabling automatic reconciliation

To enable automatic reconciliation for a recipient:

1. Go to Banking > Invoices > Recipients
2. Click on the recipient you want to enable reconciliation for
3. Click the More menu (three dots)
4. Select Enable automatic reconciliation

Once enabled, the recipient’s unique virtual account number will be displayed on all future invoices you send to them.

Payment tracking

When a recipient has automatic reconciliation enabled:

• Each recipient has a unique virtual account number for payment tracking
• Payments sent to this account number are automatically matched to open invoices
• Invoices update to “paid” status when the full amount is received
• Partial payments are tracked and applied to the invoice balance

Email notifications

You’ll receive email notifications in the following scenarios:

• Payment received: When a payment is successfully matched to an invoice and the invoice is marked as paid
• Ambiguous payment: When a payment cannot be automatically matched to a specific invoice (for example, if the payment amount doesn’t match any open invoice exactly)

When payment matching is ambiguous, you can manually review and apply the payment to the correct invoice.

Viewing recipient payment accounts

To view a recipient’s payment account information:

1. Go to Banking > Invoices > Recipients
2. Click on the recipient
3. The payment account status will show:
   • The virtual account number (if enabled)
   • “Not enabled” (if automatic reconciliation hasn’t been set up)

Karat is a financial technology company, not a bank. Banking services provided by Grasshopper Bank, N.A., Member FDIC. The Karat Visa® Business Credit Card is issued by Cross River Bank, Member FDIC, and pursuant to a license from Visa️ USA.