Supplier statement reconciliation: catch missing invoices

Key takeaways

Supplier statement reconciliation compares each supplier's statement with your purchase ledger and explains every difference: invoices you have not received, credits not applied, payments not yet allocated. Done monthly for your main suppliers, it catches missing invoices, duplicate payments and disputes before they turn into late fees or stopped supplies.

• Reconcile your top suppliers monthly, the rest quarterly.
• Most differences are timing, missing invoices or unapplied credits.
• Every difference gets a reason and an owner.
• Disputes and write-offs stay with your finance lead.

What is supplier statement reconciliation?

It is the check that your record of what you owe a supplier agrees with the supplier's record of what you owe them. Start from the statement balance, then list and explain each difference until the two agree. Differences fall into a few types, and each type has a standard action.

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What causes the differences?

Most differences come from timing, such as a payment in transit, or from documents that one side has and the other does not. A dedicated team works through them with a standard list, requests copies and logs the outcome.

• Invoices on the statement but not in your ledger.
• Credit notes agreed but not issued or not applied.
• Payments made but not allocated by the supplier.
• Duplicates and pricing disputes.

• Three-way matching: stop paying invoices you should not
• Cash allocation: match customer payments to invoices daily

What does reconciliation save?

In an illustrative example, reconciling 30 main suppliers monthly at 20 minutes each takes 10 hours and finds two missing invoices and one duplicate payment of £1,800. These are example figures. The Late Payment of Commercial Debts rules let suppliers claim statutory interest on late invoices, so missing invoices found early avoid charges as well as stopped accounts.

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When is it not worth doing monthly?

Monthly reconciliation is not worth it for small suppliers you pay on receipt with few transactions. Reconcile those quarterly or when a statement shows an unexpected balance. Concentrate on suppliers with high volume, credit terms or frequent credits.

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What does this look like in practice?

A pattern we see: a supplier puts an account on stop over an invoice the business never received. Monthly reconciliation would have found it weeks earlier, when it was a two-minute email.

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Reconciliation checklist

Run each reconciliation with these steps.

• Request statements on a fixed date.
• Start from the statement balance.
• List every difference with its type.
• Request missing documents the same day.
• Escalate disputes to the finance lead.
• Record the reconciled balance and date.

• Purchase order processing: raise, match and close POs

Next step

Send us how many suppliers you reconcile, or should. We will suggest a monthly routine and what a managed team could take on.