Reconciling supplier statements

How to Reconcile Supplier Statements Correctly

Reconciling supplier statements is an important task for an Accounts Payable Clerk. It means checking the supplier’s statement against your own records to make sure all invoices, payments, and credit notes match. This process helps avoid mistakes and ensures that your company only pays what it owes.

A supplier statement is a summary sent by the supplier showing all invoices, payments, and balances for a set period. Your job is to compare this with your accounts payable ledger or purchase system. Differences between the two must be investigated and fixed.

Steps to Reconcile Supplier Statements

1. Obtain the latest supplier statement: Ask the supplier for the most recent statement or check your email if it is regularly sent.
2. Gather your records: Have your purchase orders, invoices, and payment records ready for the same period.
3. Match invoices: Tick off every invoice on the supplier statement against your own invoice copy to ensure they are recorded correctly.
4. Verify payments: Confirm that payments you have made appear on the statement and the amounts agree.
5. Identify missing documents: Check for any invoices you have but the supplier does not list, or vice versa.
6. Look for credit notes: Check for any credit notes or account adjustments and ensure they are reflected in your records.
7. Investigate discrepancies: If totals, invoices, or payments do not match, find the reason—missing invoices, wrong amounts, timing differences or errors.
8. Communicate with the supplier: Contact the supplier to resolve unresolved differences, such as incorrect invoices or payments.
9. Record adjustments: Once discrepancies are explained, adjust your ledger or request corrected documents from the supplier.
10. Final review and reporting: Ensure the balances now match exactly. Document the reconciliation and report any ongoing issues.

By regularly reconciling supplier statements, you help keep the company’s finances accurate. This process reduces the risk of paying too much, missing payments, or damaging supplier relationships.

This skill is essential for month-end procedures, where you confirm all expenses are recorded before closing the accounts. Accurate reconciliations improve audit readiness and financial control.