Supplier Statement

A supplier statement is a document sent periodically by a supplier - typically monthly - that sets out every transaction on the account: invoices raised, credit notes issued, and payments received. The closing balance shows what the supplier believes the buying business currently owes them. That number may or may not match what the buyer's own purchase ledger shows. The difference between the two records is exactly where accounts payable reconciliation begins.

Why Supplier Statements Matter in Accounts Payable

Supplier statements form the basis of accounts payable reconciliation. Matching a supplier's records against the internal purchase ledger at least monthly is a standard financial control for any business that buys regularly from the same suppliers. The process catches duplicate payments before they are processed, surfaces invoices that were raised but never received, and identifies credit notes sitting unallocated on one side of the account.

Without regular reconciliation, small discrepancies accumulate. A credit note from three months ago never applied. An invoice the supplier says was raised but never appeared in the buyer's system. A payment sent by bank transfer but not yet allocated on the supplier's records. Individually these look minor. In aggregate, they distort cash flow reporting, lead to overpayment, and can damage supplier relationships when disputes arise over what is actually owed.

How to Reconcile a Supplier Statement

The reconciliation process compares each line on the supplier statement against the corresponding entry in the internal purchase ledger. Items that match on both sides are agreed and cleared. Items that appear on one side but not the other need investigation: either the invoice wasn't received and posted, the payment wasn't allocated correctly, or there is an error on the supplier's records.

Common discrepancies fall into two categories. Timing differences - a payment sent last week that hasn't cleared on the supplier's system - typically resolve within a day or two. Genuine errors require direct contact with the supplier: an invoice raised twice, a credit note issued but not received, or a payment applied to the wrong account. Both types are far easier to resolve when the reconciliation is done monthly rather than at year-end.

In Zigaflow, all purchase orders, delivery notes, and supplier invoices are recorded against a supplier account. The transaction history for each supplier is visible in one place, giving the accounts payable team the information they need to work through a supplier statement without hunting across email threads or spreadsheet tabs.