How to reconcile a supplier statement to your bills

Short answer

1. Get the statement and your supplier ledger for the same dates.
2. Match each invoice and credit on the statement to a bill or credit note.
3. List the lines that do not match and ask the supplier about them.
4. Check opening balance plus the lines equals the closing balance, then pay.

Before you start

You need the supplier’s statement as a PDF or spreadsheet. You need your accounting software open on that supplier. Know the statement date, because bills dated after it will not be on it. The statement lists invoices, credits and payments with a running balance.

The manual way in Xero

1. Go to Contacts > Suppliers and open the supplier. Review the bills, credit notes and payments for the period.
2. For a printable list, open Reporting > All reports and run Aged Payables Detail for that supplier at the statement date.
3. Put the statement and the report side by side. Tick each statement line against a bill by reference.
4. Mark anything on the statement you cannot find. Mark anything in Xero that is not on the statement.
5. Check the closing balance on the statement equals the amount owing in Xero at that date.

Limits. Xero does not read the statement. You tick and compare every line yourself, and the supplier often uses a different reference format from yours.

The manual way in MYOB

Open the purchases or payables reports for the supplier and run the aged payables detail at the statement date. Tick each statement line against it. The steps and the limits are the same as in Xero.

The Pulsify way

1. Forward the statement or upload it. Pulsify recognises a statement of account and lists it under Supplier Statements.
2. It reads the period, the opening and closing balance and every line.
3. It matches each invoice line to a bill, and each credit line to a credit note, from Pulsify and from Xero or MYOB. The match uses the supplier and the reference. Amounts must be equal and the currency the same.
4. Each unmatched line gets a reason, such as Missing, Not found, Duplicate or the amount your system holds. Payment lines never block.
5. The Balance card checks opening balance plus the lines against the closing balance. It says These reconcile or how many dollars apart they are.
6. Fix or accept the differences. Mark as reconciled. If a gap is left, Pulsify asks you to confirm and records who did it.

The supplier must be linked to a contact before lines can match. Pulsify matches only authorised or paid bills in Xero and open or closed bills in MYOB. Draft bills are not used.

Worked example

Example Timber Co sends a statement for September.

Line	Statement	Your books	Result
INV 1041	$1,210.00	$1,210.00	Matched
INV 1052	$880.00	$880.00	Matched
INV 1060	$495.00	Not found	Missing
CRN 207	-$110.00	$110.00 credit	Matched
Payment	-$1,210.00	Paid	Payment

Opening balance is $0.00. Invoices $2,585.00, less credit $110.00 and payment $1,210.00 gives a closing balance of $1,265.00. Your books show $770.00. The difference is $495.00, the missing invoice 1060. Ask Example Timber Co for it. Pay the $770.00 now.

Common mistakes

• Reconciling to the statement total only. Two errors can cancel each other out.
• Paying the statement balance with a missing invoice or unissued credit in it.
• Not leaving a note on a disputed line, so the same query returns next month.

Next step

Try an invoice at app.pulsify.tech/sign-up. Or book a call to find out how customers have saved hours per week after switching.

Read the supplier statements guide. Try the free supplier statement reconciliation tool or the glossary entry. A longer view of the problem is in the blog post on supplier statement reconciliation in Australia.