Huge volumes of invoices pour in every month and each vendor or supplier usually wants paying immediately! Supplier reconciliation is, however, a rather important process which ensures your business gets what it has ordered and pays for and is not overcharged.
Volume of statements
As we’ve already mentioned, one of the key challenges is the sheer volume of invoices that the accounts department receives from vendors and suppliers. If you try to reconcile these statements as they come in, you may run into trouble since the amounts may not match until the month end and you could still end up overpaying
A mix of formats
Supplier invoices tend to arrive in whichever format they like to use, rather than one that is easy for you to process. You may have to translate their reference number to yours, investigate the item labels and break down the amounts. Just finding the information you need on an invoice can be a hard task.
Old balances brought forward
Often you will find that your supplier’s invoice figures don’t match the value of your deliveries, or your purchase orders for the month. This will either be because the supplier has over or under-charged, or, much more likely, they have rolled over a previous balance. However, invoices do not always detail the rolled over amount – leaving you to investigate where it may have come from. There is little you can do about this other than develop processes for the quick identification of brought forward amounts to help speed up your reconciliation