Reconciliation sounds like an accounting term that doesn't apply to you. But if you have an MCA, it's the single most important thing you can do to protect your business.
All it means is this: compare what you've actually paid against what you agreed to pay. If those numbers don't match, you have a problem. If you've never checked, you might already have one.
Gather your agreement terms
Pull out your MCA contract. You need three numbers: the advance amount, the factor rate, and the total payback amount. If you can't find the total payback amount, multiply the advance by the factor rate. A $40,000 advance at 1.38 means your total obligation is $55,200.
Write that number down. Everything else is about comparing reality to that figure.
Export your bank transactions
Log into your business bank account and download transactions for the entire period the MCA has been active. CSV or spreadsheet format is best. If you can only get PDFs, you'll need to pull the numbers manually, which is tedious but doable.
Filter for the MCA lender's name. This gets tricky because the transaction description doesn't always match the company name on your agreement. Look for any ACH debits that started around the time you received the advance. The amounts will be roughly consistent, give or take normal daily variation.
If you have multiple MCAs, you need to separate them. Different lenders, different transaction descriptions, different start dates. Don't mix them.
Add up every payment
Sum every debit you've identified. This is your actual total paid to date.
Compare that number to the total payback amount from your agreement. Three things can happen:
Your total is less than the payback amount. You still owe money. The difference is your remaining balance. Keep tracking.
Your total matches the payback amount. You're done, and the debits should have stopped. If they haven't, you're being overcharged right now.
Your total exceeds the payback amount. You've overpaid. The difference between what you've paid and what you owed is money the lender took without entitlement. This happens more often than you'd expect.
Check the daily amounts
Even if your total hasn't crossed the payoff line yet, look at the individual debit amounts. Your agreement specifies either a fixed daily amount or a percentage. If the debits are consistently higher than what the contract says, you're being overcharged on every single payment.
A $50 daily overcharge across 120 business days is $6,000. That math adds up fast.
Document and send a reconciliation letter
Once you have your numbers, put them in writing. A reconciliation letter to the lender should include: the agreement date, the advance amount, the factor rate, the total payback amount, your calculated total paid to date, and the discrepancy if there is one.
Send it certified mail. The lender is required to respond. If they don't, or if their numbers conflict with yours, you have the beginning of a formal dispute.
The point of reconciliation isn't just to find problems. It's to create a paper trail that proves you did the work. If this ever ends up in front of a judge or arbitrator, the business owner who can show a documented reconciliation is in a completely different position than the one who just says "I think I overpaid."