What is a payment processor settlement report?
The document that explains the gap between what your customers paid and what your bank received.
A settlement report, also called a payout report, is the statement a payment processor gives a merchant. It lists the transactions the processor collected on your behalf over a period, the fees and adjustments it deducted, and the payout it transferred to your bank account. It is the only document that connects a customer payment to the deposit that eventually appeared in your bank.
Why it exists
When a customer pays by card, the money does not go to you. It goes to the processor, which holds it, nets off its fees and any refunds or disputes, then transfers a batch to your bank on its own schedule. Your bank statement shows only that batch: one number, usually a day or two late, with a reference that means nothing on its own. The settlement report is what turns that number back into a list of sales.
What is on it
- Transaction lines. Each charge, refund, chargeback and adjustment, with a date and a reference.
- Gross amount. What the customer paid.
- Fee. What the processor kept, usually a percentage plus a fixed amount, sometimes with tax on the fee.
- Net amount. Gross minus fee, which is what actually moves toward your bank.
- Payout identifier. The batch this line belongs to, so you can group lines into the deposit they made up.
- Currency and rate. On cross border payments, the original currency, the settled currency and the rate applied.
How to read one in five minutes
- Find the payout total and the payout date, and locate the matching deposit on your bank statement.
- Sum the gross amounts of the lines in that payout. That is your revenue for those sales.
- Sum the fees. That is your true cost of collection for the batch.
- Check gross minus fees equals the payout. If it does not, look for refunds, chargebacks or a reserve.
- Note any line dated in a different period from the payout, because that is where sales reports and bank reports legitimately disagree.
Common misreadings
Treating the bank deposit as revenue understates income and hides the fees completely. Treating gross sales as cash received overstates what you actually have, because part of it never arrives. Counting a refund as a purchase double penalises the month. And ignoring the settlement delay makes the last few days of every month look weaker than they were.
Doing it with Karchu
Upload the settlement report and the bank statement for the same period. Karchu recognises the common export formats, writes the fee as its own line so the arithmetic is visible, and totals fees separately in the pay in and pay out report. The provider by provider detail is on the processor analyzer page, and the underlying concept is covered in gross, fee and net.