A supplier statement shows £6,200 outstanding; your purchase ledger shows £4,800. The £1,400 difference needs a transaction-by-transaction explanation.
To reconcile supplier statements, compare the records behind each balance and establish what needs correcting or following up. The statement summarises the supplier’s account. Individual invoices, credit notes and payment evidence provide the detail needed to check what you owe.
Start with the same account and cut-off date
Check that both records cover the same supplier account, legal entity and currency. Use the statement date as your cut-off. Comparing a month-end statement with today’s ledger brings later transactions into the calculation.
Gather the statement, ledger transaction history, previous reconciliation, invoices, credit notes and payment evidence. If the statement lists only unpaid items, request transaction history where an earlier balance needs investigating.
Processing records are useful when tracing documents awaiting review or approval. For NetSuite users, Kefron’s Netsuite Accounts Payable Automation provides a direct API connection between invoice processing and ERP records.
Before matching the period’s activity, agree the opening balances. If they differ, revisit the previous reconciliation and check whether its outstanding items were resolved. An earlier payment awaiting allocation or an unprocessed credit note can carry a difference forward, even when every new invoice matches.
Keep each unresolved opening item separately identified, with its original reference and explanation, rather than absorbing it into a balancing adjustment.
Match invoices, credits and payments
Work through both records, marking matched transactions and listing unmatched items. Compare invoice references, gross amounts and dates, allowing for differences between document dates and posting dates.
Match the transaction, not just its value: two invoices can have identical amounts but relate to different purchases. Check credit notes against the documents and their allocations, as a credit may cover only part of an invoice.
For payments, compare the ledger entry with payment evidence and remittance advice, which identifies the invoices being settled. The supplier might have received the money but allocated it elsewhere. Account totals can therefore agree while an individual invoice still appears overdue.
Separate corrections from timing differences
Classify unmatched items before changing the ledger.
For an invoice appearing only on the statement, search the processing records and check whether it is awaiting approval or posted to another account. If you cannot find it, request a copy from the supplier and validate it before recording it.
Kefron’s documented workflow separates extraction, review, approval and ERP synchronisation. Check the posting status: receipt or capture alone does not establish that an invoice is included in the purchase-ledger balance.
Check missing credit notes against the supplier’s issued documents. For a payment absent from the statement, confirm its date, amount and receipt with the supplier.
Treat a documented timing difference as a reconciliation item. Reserve ledger corrections for verified errors or omissions.
A worked supplier reconciliation
Consider a hypothetical reconciliation at 30 April. The opening balances agree, the ledger shows £4,800 owed and the statement shows £6,200. All amounts are gross.
Investigation identifies three differences:
- A £1,200 invoice appears on the statement but is missing from the ledger.
- A £300 credit note appears on the statement but is also missing from the ledger.
- A £500 payment recorded in the ledger on 30 April reaches the supplier on 2 May.
Starting with the ledger balance, the statement figure is explained as follows:
£4,800 + £1,200 − £300 + £500 = £6,200
The invoice increases the amount owed; the credit reduces it. The £500 is added back solely for comparison with the statement, which has yet to reflect that payment.
After validating and recording the missing invoice and credit note, the ledger balance becomes £5,700. Deducting the evidenced £500 payment from the statement also gives £5,700. The payment needs no further ledger entry.
Record the explanation and finish the follow-up
Maintain a reconciliation schedule showing each item’s reference, amount, explanation, supporting evidence, owner and next action. Give supplier queries a follow-up date.
Retain the original statement and ledger extract alongside the schedule. Preserve the starting figures if records change during the investigation, allowing another reviewer to follow the calculation.
Mark the difference as explained once every reconciling item has supporting evidence. Keep corrective work open until the required postings, allocations and supplier queries are resolved.
David Prior
David Prior is the editor of Today News, responsible for the overall editorial strategy. He is an NCTJ-qualified journalist with over 20 years’ experience, and is also editor of the award-winning hyperlocal news title Altrincham Today. His LinkedIn profile is here.
