9 Tips to Prepare For Supplier Statement Reconciliation

9 Tips For Supplier Statement Reconciliation

Supplier statement reconciliation lets Accounts Payable teams confirm that the ledgers are appropriately balanced. This involves collaborating with suppliers to make sure that invoices and credit notes on their statements correspond with the AP’s purchase ledger. If you aren’t sure how to prepare for a Supplier Statement Reconciliation, these nine tips will help.

1. Understand Your Company’s Goals and Objectives

Understanding what your business wants to achieve will help you determine what you need to establish during the reconciliation process. For example, if your goal is to improve supplier relationships, you’ll need to focus on communication and collaboration.

Follow these tips to comprehend your business’ bottom line better:

  • Become familiar with your company’s accounting policies and practices.
  • Review the organization’s chart of accounts.
  • Identify the types of reports that are most important to decision-makers.

2. Know Your Suppliers

Working closely with your suppliers is essential for a successful reconciliation process.

To streamline the SSR, it is essential that you:

  • Maintain updated contact information for each supplier.
  • Understand each supplier’s billing cycle.
  • Be aware of any changes to the purchased products or services.
  • Know how they prefer to communicate (e.g., email, phone, fax).

3. Know Your Data

You can’t improve what you don’t measure. Before starting the reconciliation process, take some time to understand your current data situation. This will help you set baselines and track progress over time.

Here’s what you can do:

  • Analyze your current data to identify any gaps or errors.
  • Determine which data points you need to collect from suppliers.
  • Develop a system for tracking supplier data (e.g., Excel spreadsheet, Access database).

4. Define Reconciliation Ownership

One of the most important aspects of a successful reconciliation process is defining who owns what. This may seem like a no-brainer, but it’s crucial to ensure that everyone understands their roles and responsibilities.

5. Set Up Known Differences

There will inevitably be some differences between the supplier statement and your records. To prevent these from turning into discrepancies, set up known differences beforehand. This could include early payment discounts or discrepancies in exchange rates.

6. Communicate, Communicate, Communicate

Make sure you keep lines of communication open with your suppliers and that everyone involved in the process is up to date. Besides, use these communication tips whenever possible:

  • Confirm receipt of statements and supporting documentation.
  • Request an explanation for any unusual items on the statement.
  • Advise suppliers of any discrepancies found and agree on a resolution.
  • Document all communication (e.g., email, phone call logs).

7. Automate Where Possible

The reconciliation process can be time-consuming, so automating as much as possible will free up time for other critical tasks.

Here are some tips for automating:

  • Use purchase order software to automate matching invoices and goods received notes.
  • Set up rules and workflows to automatically route invoices for approval.
  • Use an e-invoicing solution to receive invoices electronically.

8. Use Technology

Many software solutions like Statement Matching can help with the reconciliation process. Utilizing one of these will make your life a lot easier.

Such software will offer helpful features like:

  • The ability to reconcile statements automatically.
  • A centralized repository for all your supplier statements.
  • A workflow to manage the process.
  • Real-time visibility of the reconciliation process.

9. Review and Amend Processes Regularly

The reconciliation process is never truly ‘finished.’ As your business grows and changes, you’ll need to regularly review and amend your processes to ensure they’re still suitable.

Final Word

SSR is crucial in any supply chain, and it makes sense to prepare extensively to eliminate process irregularities. By following these tips, you can streamline your supplier statement reconciliation process and free up time to focus on more critical tasks.

Did You like the post? Share it now:

Share on facebook
Facebook
Share on linkedin
LinkedIn
Share on twitter
Twitter
Share on pinterest
Pinterest
Share on reddit
Reddit

Related Posts