Key takeaways
- A break log is the record of every difference a reconciliation finds and what happened to it.
- It is one of the first documents auditors and regulators ask for, because it shows whether the process works.
- Each entry should record the break, its class, owner, age, cause, resolution, approval and closing date.
- Customer-money breaks, such as safeguarding shortfalls, should also record when the correction reached the bank.
What a break log is for
Every reconciliation produces some items that do not match. A break log records each of them from the moment it is found until it is closed. It answers the questions every auditor, examiner and senior manager asks: how many breaks are open, how old are they, who owns them, why did they happen and what was done.
Keep one log per entity and reconciliation type, using the same fields everywhere. A consistent structure lets leadership compare entities and processes, and lets auditors test any part of the business in the same way.
For regulated firms, the break log is also evidence. Under the UK's CASS 15, firms must investigate every difference and correct shortfalls by close of business on the day found. In the US, examiners test whether permissible investment breaks were resolved. A complete break log is how a firm shows it met those requirements, day after day.
The template below is written for payment operations, finance and safeguarding teams. It works for any reconciliation, from bank and processor matching to customer-money calculations.
The template
Record one line per break. The table lists the fields and an example entry for a safeguarding shortfall.
| Field | Example entry |
|---|---|
| Break reference | BRK-2026-10-06-014 |
| Entity and reconciliation | Example EMI Ltd, internal safeguarding reconciliation, e-money pool |
| Date and time found | 6 October 2026, 17:12 |
| Amount and currency | £3,700.24 |
| Class | Customer-money shortfall |
| Owner | Safeguarding operations lead |
| Cause | Processor settlement received in operating account after cut-off, not swept |
| Resolution | £3,700.24 transferred to safeguarding account, reference TRF-88231 |
| Correction reached bank | 6 October 2026, 17:42 |
| Approved by and time | Head of finance, 17:35 |
| Root cause action | Sweep moved earlier than reconciliation point |
| Date closed | 6 October 2026 |
Ageing and escalation
Each open break should show its age in days, calculated automatically from the date found. Set escalation points by class. A customer-money break should escalate the same day to the senior manager responsible. Status mismatches and missing items should escalate within a day or two. Amount and timing differences can follow longer limits, provided they are reviewed. Record each escalation in the log, so the history shows who knew and when.
Ageing must be honest. A break that is closed and reopened under a new reference, or split into smaller items to reset its age, hides the real history. The log should carry the original date found for every break, whatever happens to it later.
Using the log well
Review the log daily for new and escalated breaks, and weekly for patterns. If the same cause appears repeatedly, record a root cause action and track whether the breaks stop. Report open breaks by age and class to leadership, as set out in our guide to reconciliation KPIs. Lock closed entries so they cannot be changed after approval.
Separate the break log from the breach log. A break is any difference; a breach is a failure to meet a rule, such as a shortfall not corrected on time or a reconciliation not performed. Every breach should link to the break that caused it, and breaches that must be notified to a regulator should record the notification date.
Spreadsheet logs work at low volumes but are easy to edit and hard to keep complete as volumes grow. Safeheld records every break automatically from the reconciliation, with owner, age, investigation, approval and correction evidence attached. See reconciliation break management and safeguarding shortfalls and excesses.
Frequently asked questions
What is a reconciliation break log?
A record of every difference a reconciliation finds and what was done about it, from detection to closure.
What fields should a break log include?
Reference, entity and reconciliation, date found, amount, class, owner, cause, resolution, approval, root cause action and date closed.
Why do auditors ask for the break log?
Because it shows whether breaks are found, owned, explained and resolved on time.
Is a spreadsheet break log acceptable?
It can work at low volumes if entries are complete and locked after approval, but becomes hard to control as volumes grow.
References
- FCA, PS25/12: Changes to the safeguarding regime for payments and e-money firms
- FCA Handbook, CASS 15.8 Records, accounts and reconciliations
About Safeheld
Safeheld reconciles client money every day, resolves every difference and prepares every regulatory return for sign-off, for regulated firms in the United States, the United Kingdom, the European Union, Canada, Australia, Singapore and Hong Kong. To discuss your operations, contact us at safeheld.com/contact.
This article is for general information and does not constitute legal or regulatory advice.