The supplier statement says you owe ₹1,46,000. Your accounts payable ledger says ₹1,25,000. Before putting either number on the payment proposal, trace the ₹21,000 difference to individual invoices, credits and payments. This supplier statement reconciliation example shows what to check, who should act and when each item can be closed.
Compare the same period and account
Pull the supplier statement and ledger for the same legal entity, supplier account, currency and closing date. If the opening balances differ, start with the last agreed reconciliation and bring forward unresolved items. Check document numbers and amounts together. When one bank transfer covers several invoices, match it using the remittance advice and the bank reference.
Supplier statement reconciliation worked example
The example uses a 31 October cut-off and illustrative amounts.
| Exception | Amount | What to check and do |
|---|---|---|
| Missing invoice INV-482 | ₹15,000 | Get the invoice, check the purchase order and receipt, and search for an existing posting or accrual. Route the supported invoice for approval and posting. |
| Missing credit note CN-071 | ₹4,000 | Match the credit note to the original invoice. Confirm it belongs to this account and is still unrecorded before posting and applying it. |
| Unallocated payment UTR-908 | ₹10,000 | Trace the bank reference, beneficiary and remittance advice. Ask the supplier to allocate the confirmed payment and send an updated statement. |
Company ledger after approved entries: ₹1,25,000 + ₹15,000 − ₹4,000 = ₹1,36,000.
Supplier balance after the reconciliation adjustment: ₹1,46,000 − ₹10,000 = ₹1,36,000. The payment is already recorded in the company ledger. Keep it open in the reconciliation tracker until the supplier confirms the allocation.
How to match documents during supplier statement reconciliation
Start with exact invoice matches, then review partial payments and credits. Supplier statements may show a shortened reference, a different date format or an amount split across several rows. Check those rows against the invoice and remittance before marking them as matched. Save the original statement and ledger export with the working paper so a reviewer can reproduce the match.
For a missing invoice, search by supplier, amount and purchase order. A document may already be recorded under a different reference or held in an approval queue. Compare the invoice date with the goods receipt and posting date to establish whether the difference belongs to this period. If the receipt was already accrued, check with the ledger owner before booking another expense.
If you track differences in Excel, use SUMIFS to total unresolved items by supplier and exception type. Compare that total with the unexplained difference before sign-off. Microsoft’s SUMIFS documentation
What to send the supplier about an unallocated payment
Send the payment date, amount, bank reference and the invoice numbers covered by the remittance. Ask which invoices the payment was applied to and request an updated statement. A transfer for ₹10,000 can remain open in the supplier’s records if the remittance went to another team or the payment was applied to a different account. Keep the item with an owner and a follow-up date until the allocation is confirmed.
If the supplier has received the funds but allocated them to the wrong invoices, compare both sets of open items again after the correction. The closing balances can agree while individual invoices still appear overdue. Checking the allocation helps prevent an invoice from being included in a second payment run.
Supplier statement reconciliation sign-off checklist
- Confirm both reports use the same cut-off, currency and supplier account.
- Check that every company-side correction has an approval and a posting reference.
- Record supplier-side items separately and retain correspondence or updated statements.
- Carry unresolved differences into the next reconciliation with a named owner and due date.
- Review the open invoices before preparing the next payment proposal.
Keep the difference visible when evidence is missing. If a supplier disputes the invoice or credit amount, record what each side shows and who will resolve it. The sign-off should explain every adjustment and show which items remain open.
When a credit note is issued after the cut-off
Keep the date of the supplier credit note visible in the working paper. If a November statement includes a credit against an October invoice, compare the October position using records for the October cut-off. Review the credit with the person responsible for the close before making a period-end adjustment. Keep a copy of the original invoice, the credit note and the correspondence explaining the price or quantity correction.
A credit may already be in the company ledger but applied against a different invoice. In that case, check the open items on both sides and agree which invoice the credit should settle. Record the allocation in the tracker so the same credit cannot be used twice in the payment proposal.
Carry forward unresolved items
At the next close, start with the previous supplier statement reconciliation and check each open exception against new postings and correspondence. If the ₹10,000 payment in the example has now appeared on the supplier statement, match its reference and remove the temporary supplier-side adjustment. If it still has no match, carry the amount forward with the last contact date and the next escalation date. This gives the reviewer a clear trail from the first mismatch to its eventual resolution.
Close each exception with evidence
File the supplier statement reconciliation with the month-end close records. Include the original balances, the adjustment schedule and the date each unresolved item will next be reviewed.
Record the document reference, amount, owner, next action and follow-up date. For an invoice or credit note, verify the approved ledger posting and keep its reference in the tracker. For the supplier-side allocation, keep the bank evidence and the supplier’s confirmation together. If the supplier cannot trace the payment or the beneficiary details differ, escalate the discrepancy before proposing another payment.
Once the balances agree, use the Vendor Reconciliation worked example and Excel format to document the adjustments. Then use Vendor Ageing Analysis to prioritise the open invoices and assign follow-ups.
