Supplier statement reconciliation in Accounts Payable: from totals to explained items

A request to “please check the balance” often triggers a chain of questions without identifying a specific document. The supplier sees an unpaid invoice; the client sees a payment that has not been allocated to it. Different references or a missing credit note complicate the discussion, even when both sides report the same total.

This guide covers an operational comparison of a supplier statement with Accounts Payable records. It is neither an instruction for formal balance confirmation nor a month-end closing calendar. The aim is to identify which documents and allocations need a specific explanation.

1. Compare the same trading relationship and currency

Agree the client legal entity, supplier entity, account references on both sides, currency and statement date. One brand may represent several separate entities. Do not combine their balances merely because emails come from the same domain.

Also agree a sign convention. A working table can show liabilities as positive and credits or payments as negative. Compare the same amount basis, normally gross settlement amounts in the transaction currency. Separate PLN, EUR and other currencies; do not offset differences by adding unlike units.

2. Obtain an as-of report, not just today’s list

Dynamics 365 Finance documentation describes the Vendor open transactions report with Open transactions per and Exclude future settlement parameters. Check their meaning before exporting; a file’s creation date does not establish the date of the open-item position.

Microsoft also warns that the Open including closed on or after date transaction-list filter still displays current balances. Do not automatically treat it as a historical balance report. Retain the report name and settings so another person can reproduce the comparison.

3. Match documents rather than amounts alone

For each invoice, compare the counterparty, full document reference, date, currency, original amount and amount still open. Keep the supplier reference alongside the internal ERP identifier. Removing every non-alphanumeric character can merge different references; normalization rules need agreement.

One payment can cover several invoices, and one invoice can have several payments. Compare the linked group of documents in such cases. The same amount and a similar date are clues to investigate, not sufficient matching evidence. The example below shows why comparing totals alone cannot complete the review.

Example: PLN 9,000 on both sides, but two differences

4. Separate payment execution from invoice allocation

Business Central supports applying a payment to one or several open entries, including partial application. That is distinct from merely recording a payment. In the system in use, inspect the application record rather than just finding a transfer on a list.

If the supplier still shows the invoice, establish the payment execution date, recipient, currency, reference and amount allocated to the document. Check whether funds were assigned to another invoice or remain unapplied. Describe a timing difference using dates from both sides instead of marking an item “paid” without evidence.

5. Identify the missing evidence for each discrepancy

Classify specific cases: an invoice only on the supplier’s statement, a document only in AP, a missing credit note, a different payment allocation or a different open amount. For a missing invoice, request the document and check whether it arrived previously. For a credit note, establish its source document and related invoice.

In this example, credit note K-1 and payment P-1 create differences with opposite signs. Their offset does not explain either item. If both events are confirmed for the same date, the complete position could be PLN 8,000. This follows the example’s assumptions; it is not an instruction to post an entry or make a payment.

6. Send one precise supplier query

Instead of repeating “check the account”, specify the comparison date, currency and a short list of disputed items. For each item, provide the reference, amounts on both sides and a question: a credit-note copy, payment allocation or explanation of the invoice balance. Do not attach other suppliers’ statements.

An outsourced AP team can prepare comparisons, collect documents and manage queries within the agreed scope. Approval of adjustments and payments remains with appropriately authorised client personnel. A supplier statement is not a payment instruction or permission to change payment details.

7. Finish with an outcome for every item

Distinguish a matched item, an explained difference awaiting action and a still unresolved case. Record the agreed cause, evidence, owner and next-action deadline. A supplier reply does not automatically complete the ERP work; after an approved change, refresh the comparison and check its effect.

BackOffice Outsourcing includes checking balances, resolving differences and documenting actions in its finance and accounting process scope. If supplier queries keep returning to your team despite outsourcing AP, clarify the inputs and expected reconciliation result. Describe your process to the team to agree an appropriate scope of cooperation.

Sources and scope

• Microsoft Learn - Vendor invoices overview: Vendor open transactions report
• Microsoft Learn - Vendor transactions list page: transaction filters
• Microsoft Learn - Reconcile vendor payments and vendor ledger entries

Microsoft documentation checked on 17 October 2026. System examples concern the named products, not a claimed implementation at BackOffice Outsourcing. The table, discrepancy categories and workflow are editorial proposals to adapt to client procedures.