The steps
- Compare the statement balance to your ledger balance for that vendor
- Tick off every invoice, credit and payment that appears on both
- List items on the statement that are missing from your books
- List items in your books that the vendor has not recorded
- Resolve each difference and document the outcome
When to do it
Monthly for your largest vendors and on request for any vendor whose balance looks wrong. Reconciling before payment runs avoids paying for invoices that are disputed or already settled.
Frequently asked questions
Do I need to reconcile every vendor?
Focus on high-volume or high-value vendors, and on any where a payment dispute is likely.