At month end, a supplier sends a statement showing several invoices, a credit and a payment. Your accounts payable report shows a different balance. The difference may be a bill that never reached accounting, a payment the vendor has not applied, a disputed charge or a credit that was missed. Paying the statement total without investigating can turn a small discrepancy into a duplicate payment.
Understand what the statement represents
A vendor statement summarizes activity according to the supplier's records. It is not necessarily a bill that should be entered into the accounting system. Individual invoices, approved credits, receiving documents and payment evidence remain the supporting transactions. Keep the statement as a reconciliation document and use it to investigate exceptions.
Compare the same vendor and cutoff date
Confirm the vendor's legal name and account number. Pull the open accounts payable detail, vendor transaction ledger, unpaid invoices, credit memos and payments through the statement date. If the statement includes activity after your ledger cutoff, isolate that timing difference rather than treating it as an error. Search for duplicate vendor records that could split the activity.
Match invoices and credits one by one
For each statement line, match invoice number, date, amount and supporting approval to the ledger. Watch for duplicate invoice numbers with slightly different formatting, invoices entered under another vendor name, and charges recorded in the wrong period. When the statement includes a charge that is missing from the books, request the original invoice and verify receipt of goods or services before recording a payable.
Compare credits separately. A supplier may issue a credit for a return or price correction that has not yet been entered or applied. Confirm its amount and the invoice or balance it offsets; do not assume the credit is cash already received.
Trace payments without issuing another one
Match each payment to the check register, ACH confirmation or bank activity. A payment appearing in your books but not on the statement may be in transit, applied to another invoice or still unresolved by the vendor. Contact the supplier with remittance details and request clarification before reissuing funds. If a payment truly failed or was returned, document the bank evidence and approval for the correction.
Record exceptions and assign ownership
Use a short log with vendor, invoice number, amount, difference type, supporting document, owner, next action and follow-up date. Typical categories are missing invoice, unrecorded credit, payment application, disputed charge, duplicate entry and timing difference. Keep the reconciliation and evidence together for later review.
Do not automatically adjust the general ledger to equal the vendor's statement. A valid timing difference may require no entry. A genuine omission or error requires support and review under the business's accounting policies.
Build a repeatable monthly control
- Select key vendors by spend, transaction volume, prior errors or payment risk.
- Reconcile statements to open accounts payable and payment history.
- Obtain original documents before entering missing bills or credits.
- Escalate unexplained differences and document their resolution.
- Review unresolved items before the next payment run.
University accounting-control guidance supports separating purchasing, approval and reconciliation responsibilities and reviewing vendor invoices against purchases and receipt of goods or services. See UC Davis Accounts Payable Internal Control Practices and University of Toledo Internal Audit: Process Accounts Payable. Adapt those controls to your team's size and software.
When to bring in accounting support
Summer Peaks can take on vendor statement reconciliations, accounts payable, payment-run preparation or a defined bookkeeping project without requiring a full-time employee. All client work stays in the United States. Discuss the accounting work you want to hire out.