Reconciling Ozow settlements with payments
Why Ozow's settlement to a South African business never matches the day's customer payments, and how a clearing account makes the two reconcile.
By Achekam · · 5 min read · For Running a business businesses in South Africa
On Monday, eleven customers pay their invoices by Ozow. On Tuesday, one deposit from Ozow lands in the business bank account, and it matches nothing: not Monday's total, not any single invoice, not the sum of the invoices marked paid. The bookkeeper starts ticking through statements line by line, and the month-end close slips.
Nothing has gone wrong. Payments and settlements are two different events, and a business that records them as one will never get them to agree. This article explains the difference, the clearing account that bridges it, why payment notifications must be authenticated, and how Achekam records each step so the bank statement reconciles.
Payment versus settlement
Ozow's integration hub says customer payments arrive at Ozow first and are settled to the merchant on a schedule, so what was paid today and what was settled today are different amounts.
Think of it as two separate conversations:
- The payment is between your customer and Ozow. The customer pays, Ozow confirms it, and from that moment your customer has paid you.
- The settlement is between Ozow and you. On its schedule, Ozow pays across what it holds for you as one amount covering many payments, and its fees have to be accounted for alongside that payout.
Because settlement runs on its own schedule, one deposit need not line up with any single day's payments, and any attempt to match it directly to invoices is likely to fail. Ozow's integration hub explains how payments reach Ozow before they are settled to you, along with hosted and embedded checkout, refunds and payouts.
Before any of this applies, the hub notes that a business needs an Ozow merchant account before it can integrate Ozow payments. For businesses that do not write code, the hub also offers ready-made plugins for Shopify, WooCommerce, Magento and other platforms.
The gateway clearing account
The accounting answer is a clearing account: a ledger account that holds money that is yours but not yet in your bank.
- When a customer pays, the receipt goes to the clearing account, not to the bank. The customer's invoice is settled; the money now sits "at Ozow".
- When Ozow settles, the payout moves money from the clearing account to the bank, and the fee Ozow deducted is recorded as an expense from the same clearing account.
- What is left in the clearing account at any moment is what Ozow still holds for you.
Done this way, the bank deposit matches a payout entry exactly, and the clearing account explains the gap between what customers paid and what arrived. If the clearing balance keeps growing, a settlement has been missed or a payout was not recorded; if it goes negative, a payout or fee was recorded twice or a payment was missed.
Authenticate notifications before acting on them
Every online payment produces a notification, and a business that acts on notifications without checking them is exposed. Ozow's integration hub says payment webhooks arrive at a public URL without the merchant's credential, so they must be authenticated before anyone acts on them: with a hash field on the Payments API, or a Svix signature on One API.
The reason is simple. A public URL can receive a message from anyone. A notification that says "invoice paid" is only trustworthy once it has been verified as coming from Ozow and matching a real transaction. Marking invoices paid, releasing goods or recording receipts on the strength of an unverified message is how false payments get into the books.
How Achekam records Ozow payments
A South African business can take Ozow instant EFT payments in rand through Achekam, with each completed payment confirmed through Ozow's transaction lookup. The confirmation comes from asking Ozow about the transaction, not from trusting a message alone.
A verified gateway payment is recorded as a receipt against the invoice. Achekam debits that gateway's clearing account and credits trade receivables, and the invoice shows as paid or part-paid. The amount is checked against what the payment link asked for, and a repeated notification never pays an invoice twice. So the first half of the clearing-account method above happens as the customer pays, and your sales, receipts and receivables stay in the same books as the invoice.
The second half, the settlement, is recorded separately. Payouts from each payment gateway are recorded against that gateway's clearing account with its fees. For Ozow this is done by hand: when the settlement arrives, record the payout amount and the fee against the Ozow clearing account. (Two other gateways, Paystack and Flutterwave, can also be recorded from their own payout lists.) The wider set-up of online payments on invoices is covered in online payments on your invoices.
Matching the deposit on the bank statement
With both halves recorded, the bank reconciliation becomes straightforward:
- Take Ozow's settlement report for the payout.
- Confirm that the payments it lists are the receipts already recorded in the clearing account.
- Record the payout and Ozow's fee against the clearing account, as above.
- Match the deposit on the bank statement to the payout entry; the amounts should be identical.
- Review the clearing account balance against what Ozow shows as still unsettled.
A worked example in words: Monday's eleven payments were each recorded as receipts against their invoices, so the clearing account holds Monday's total. Tuesday's settlement covers those payments less Ozow's fee. You record the payout and the fee, the clearing account falls back by Monday's total, and Tuesday's deposit matches the payout to the cent. Card settlements follow a similar pattern, explained for retailers in reconciling card settlements.
Make the clearing account part of the close
Check the Ozow clearing account at every month-end. A balance that agrees with what Ozow still holds means payments and settlements are fully accounted for. A balance that does not is the place to start looking, long before anyone has to tick through bank statements line by line.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
