How do you prepare a supplier statement reconciliation?

Supplier statement reconciliation is a vital part of any Accounts Payable team.

A supplier statement reconciliation process allows AP teams to ensure ledgers are balanced accurately. This means working closely with suppliers to ensure that invoices and credit notes on their statements match with the transactions on the accounts payable’s purchase ledger.

Within these statements, the supplier will share information relating to credit notes and invoices in which the AP team must balance their ledgers to highlight any discrepancies or errors.

So, how does the supplier statement reconciliation process work?

In simple terms, supplier statement reconciliation is typically a two-step process as follows:

Step 1 

The accounts payable clerk will manually check the transactions on the supplier statement against the transactions that have been posted on their purchase ledger.

Any items that appear in both the supplier statement and the purchase ledger can be ticked off and marked as matched.

Step 2

Once these items have been removed from the list, any invoices or credit notes that are on the supplier statement but not posted on the purchase ledger need to be located.

This will mean trawling through email inboxes, internal in trays or by contacting suppliers for copies, which can be a time-consuming task for AP teams.

Typically, supplier statement reconciliation is fulfilled manually by AP teams, meaning discrepancies are particularly common in the process.

This is due to the nature of this type of work being open to human error.

This could be due to AP clerks simply not having the capacity to correctly identify potential errors, but there are other reasons for this too.

From inaccurate records, failure to maintain items and the build up of statements each month, manual supplier statement reconciliation is not a speedy process.

Statements that are not reconciled on a monthly basis can lead to considerable value and volume of liabilities, which is a major cause for concern for any business.

Reports produced by AP managers will therefore not give a true reflection of the position of their department as there could be a considerable amount of invoices owed without them even knowing.

Equally, there could be a large value of credit owed back to them from their suppliers in terms of credit notes.

This is why many AP teams are turning to automation when it comes to the reconciliation process of supplier statements.

This means that instead of manually trawling statements, automated software can pick up on any issues or discrepancies at the click of a button, leaving no room for errors.

With the process often being neglected and put to the bottom of the priority list for busy AP functions, the addition of specialist technology to the team is most likely welcomed, freeing up much-needed time and resources.

With years of experience in the accounts payable market, at autorecs. we understand the needs of AP teams and have adapted a system that works for both them and their suppliers.

Our web-based portal highlights discrepancies within the reconciliation process automatically, signalling any overpayments, incorrect payments or missing items immediately, with no effort needed by AP clerks.

This streamlined process allows these issues to be resolved quickly and efficiently, freeing up valuable time for accounts payable teams.

The autorecs. software stores all statements electronically and clearly maps out this information via a user-friendly dashboard, which showcases missing items and unclaimed credit notes to be followed up by AP clerks.

Suppliers can also benefit from the streamlined nature of the service, being reminded automatically via email when statements need to be uploaded, and flag any missing items to ensure all costs are accounted for.

With reports available to download at just the click of a button, the accuracy of the platform allows for the ultimate control over the reconciliation process; from start to finish.

And for just a small monthly subscription fee, this easy, automated software can not only help your AP teams by reducing the time needed for this task. It can also help to improve relationships with your key suppliers, to ensure long-standing partnerships amongst businesses.

To discuss how the expert team here at Westgate Moore Associates and autorecs. can help your business and support your Accounts Payable team, please contact us today on 0121 325 6920 or send us a message here.