Glossary

Source-of-truth validation refers to the process of verifying which system or dataset should be considered authoritative for a given financial decision. In modern finance stacks, multiple systems often contain overlapping or conflicting information, making it critical to determine which source can be trusted in each context.

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Without source-of-truth validation, finance teams may unknowingly rely on outdated, incomplete, or inconsistent data. For example, a balance in an ERP may differ from bank data, or an invoice value may not match contractual terms. Acting on the wrong source increases financial risk and undermines confidence in reporting and execution.

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Validating the source of truth involves defining clear ownership rules, aligning data across systems, and continuously checking consistency between sources. Once the authoritative source is confirmed, other datasets can be reconciled against it, ensuring decisions are made on reliable foundations.

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This capability is increasingly enabled by AI agents that can evaluate data consistency across systems in real time. At Phacet, source-of-truth validation is a key step in processes such as cash reconciliation, where identifying the correct reference data is essential to secure financial decisions.