Your customer reports a payable balance of $110,000, while your statement shows a receivable of $130,000. Reconciliation is not about forcing one number to match the other. It is about identifying the documents behind the difference. Start with the correct business entity, date range, currency and opening balance.
What is customer and supplier account reconciliation?
Customer and supplier account reconciliation compares transactions between two businesses and the amounts owed at a particular date. A statement shows the opening balance and movements behind the closing balance. Matching totals help, but do not prove every document is correct: separate errors can offset one another.
Read the two sides from the correct perspective
The seller’s receivable from a customer is the buyer’s payable to that seller. Do not expect debit and credit columns to show the same side on both statements. First establish who owes whom, then compare documents and amounts.
Align the scope before comparing statements
The same entity and account
Check the entity name, account code and relevant branch. Do not mix transactions belonging to another group company or a similarly named customer.
The same dates and currency
Align start and end dates, opening balances and the date field used. Do not directly compare balances in different currencies or exchange-rate valuations from different dates.
Example: how do you explain a $20,000 statement difference?
These illustrative records cover 1–30 October 2026 and the same USD account. Amounts are document totals including any tax. They are not customer data or converted TRY amounts.
Seller’s customer statement
- Opening balance
- $60,000
- F-301 · Sales / purchase invoice
- +$90,000
- Payments during the period
- −$20,000
- R-042 · Return credit document
- Not recorded
Buyer’s supplier statement
- Opening balance
- $60,000
- F-301 · Sales / purchase invoice
- +$90,000
- Payments during the period
- −$35,000
- R-042 · Return credit document
- −$5,000
F-301 and the opening balance match. The buyer recorded payments of $35,000, but the seller recorded $20,000. The buyer also recorded a $5,000 return credit missing from the seller’s statement. These differences total $20,000, but the explanation must be checked against bank transactions and the return document.
Reconciliation bridge: $130,000 − $15,000 − $5,000 = $110,000. This explains a possible difference; it is not a posting instruction or confirmation of agreement.
For the $15,000 item, check the bank reference, date, recipient account and settlement status. A payment instruction in the buyer’s records does not by itself prove receipt by the seller. For the return, check the document reference, related invoice, acceptance and posting status. Keep the difference under investigation until the cause is verified.
Where do balance differences come from?
Missing or duplicate documents
Match invoice references, dates and amounts. Similar amounts alone are not enough to establish a match.
Wrong account or period
Check payments posted to another account, differences between document and posting dates, and incorrect opening balances.
Returns, discounts or offsets
Find the agreed document and supporting evidence. A note or request from one party does not show that the other party has posted the same transaction.
Currency and timing
Separate transaction currency, exchange-rate date, bank settlement and period cut-off. Even a rounding difference needs an identified cause before closure.
Complete reconciliation in five steps
01 · Fix the comparison scope
Retain both statements with matching dates and currency, including their issue date and version. Explain any opening difference first.
Owner: account administrator.02 · Match documents
Compare document reference, transaction type, amount and date. Separate items found only on your side, only on the other side, and items with different amounts.
Output: a document-level difference list.03 · Gather supporting evidence
Find the invoice, return document, bank transaction or offset evidence for each difference. Assign a reviewer and a response date.
Output: evidence, owner and review date.04 · Correct records under authorised review
Have the authorised accounting owner correct verified errors using the relevant evidence and period rules. Do not create unsupported entries just to match a balance.
Output: a correction reference or an explained timing difference.05 · Confirm the outcome with the other party
Send the updated balance and remaining open items to the other party. Retain the reply, confirmation date and statement version. Keep the status as “awaiting confirmation” if no reply has arrived.
Output: confirmation or an open-difference follow-up record.
A short checklist before sending
- Entity, period, currency and balance direction are clear.
- Statements and document references are retained.
- Each open difference has an owner and review date.
- The other party’s reply and accounting corrections are tracked separately.
Reconciliation is not collection of payment and does not by itself determine the legal status of a receivable. Discuss disputes, prior-period adjustments, tax matters and document validity with your accountant and, where needed, legal adviser.
Frequently asked questions
Is reconciliation complete when balances match?
Not on that basis alone. Dates and currency must match, and duplicate or offsetting errors should be checked at document level.
What if the other party does not reply?
Record the operational status as awaiting a reply; do not assume automatic approval. Ask your adviser to assess legal consequences for the particular transaction and document.
Can a small difference simply be written off?
Identify the cause first. A small amount is not a reason for an unsupported adjustment; follow the business’s authorisation and accounting procedures.
How do you compare a foreign-currency account?
Compare the same transaction currency and period first. Review exchange-rate valuation and local-currency equivalents separately; do not match different currencies as a single total.