Supplier statement reconciliation: how to do it, with an example

What is supplier statement reconciliation?

A supplier statement is a summary of your account that a supplier sends, usually each month: the invoices and credit notes it has issued, the payments it has received and the balance it says you owe. Supplier statement reconciliation compares that balance with the supplier’s balance in your purchase ledger on the same date and explains every difference. Each difference is either timing, such as a payment still on its way, or something missing or wrong in one set of records, which you correct or query with the supplier.

Why it matters

The bank tells you what you paid. Only the supplier can tell you what it has charged. Reconciling supplier statements catches:

• Missing invoices. An invoice that was never received, went to someone who has left or is sitting in an inbox. Until it is posted, costs and creditors are understated.
• Duplicates. The same invoice posted twice, once from the email and once from the post, overstates costs and risks paying twice.
• Payments not allocated. The supplier has your money but hasn’t matched it to invoices, so the account still looks overdue and the chasing starts.
• Accruals at month end. Work done but not yet invoiced is a cost of the month. A statement often shows the gap first. If the invoice won’t arrive before you close, accrue the cost rather than leave it out.

How to reconcile a supplier statement

1. Take the statement and the supplier’s balance in your purchase ledger on the statement date.
2. Tick off each invoice, credit note and payment that appears in both, by reference and amount.
3. For an invoice on the statement but not in your books, ask for a copy and post it, or query it if you never received the goods or service.
4. For a payment in your books but not on the statement, check the date. If it was sent in the last few days, it is timing.
5. Correct your own errors, then list what is left for the supplier to explain.

Supplier statement reconciliation example

Initech Consulting Ltd, the fictional consultancy from our bank reconciliation example, receives a statement from Gibbons Data Engineering Ltd at 30 September 2026. It shows £9,000.00 owed; Initech’s purchase ledger shows £6,000.00. Amounts include VAT.

Both sides come to £5,400.00:

• £3,600.00 payment in transit. Initech paid GDE-1093 by BACS on 30 September; Gibbons will record it in October. It is the same payment that shows as unpresented in Initech’s bank reconciliation. Timing, so no entry.
• £1,800.00 missing invoice. GDE-1101 for September’s dashboard work never arrived. Initech asks for a copy and posts it in September.
• £2,400.00 duplicate. GDE-1088 was posted from the email and again from the paper copy. Initech deletes the second entry before anyone pays it.

Common causes of differences

• Payments in transit. Paid at month end, received by the supplier after its statement date.
• Invoices in transit or never received. On the statement, not in your books.
• Credit notes. Agreed on the phone but not issued, or issued and not posted.
• Unallocated payments. A payment the supplier holds on account, or applied to the wrong invoice.
• Posting errors. Duplicates, an invoice posted to the wrong supplier, or a transposed figure. If the difference divides exactly by 9, look for swapped digits.
• Disputed invoices. Goods returned or not delivered, where the supplier still shows the full invoice.

How often to reconcile

Monthly, for the suppliers you spend most with and any account with a query open, as part of the month-end close before the management accounts go out. At year end, reconcile every supplier with a balance, so creditors on the balance sheet are complete. Reconcile before a large payment run too, so you don’t pay an invoice twice or miss one the supplier is about to chase.

Supplier statement reconciliation in Briefcase Ledger

In Briefcase Ledger, supplier statements arrive the same way as invoices: forward them to your business’s Briefcase email address, send them on WhatsApp or upload them. Briefcase recognises a statement as a statement, not a bill, and puts it in its own inbox. It reads the supplier, statement date, due date, total and outstanding balance, and each line’s date, reference, description and amount.

Each line is checked against the invoices already in Briefcase on four things: supplier, date, amount and reference. When all four agree, the line reconciles by itself. When three agree, it is a suggested match to review or accept. Anything else sits under No match, to match by hand or mark as reconciled with a reason. When a missing invoice is forwarded later, Briefcase checks that supplier’s open statements again. The help centre article has the detail.

New invoices are checked for duplicates as they arrive. For regular suppliers, Ledger notices when an expected invoice hasn’t arrived by month end and, above your materiality threshold, suggests an accrual for you to review and post, then suggests the reversal when the invoice comes in.