A “perfect” statement is one which is system processed. It should be received without any human intervention and at a centralised place. Having a standardised system process enforces management policies, audit controls all in a best practice environment with improved visibility.
Supplier statements are important documents usually issued monthly to the business by a supplier of goods or services. The statements contain details of all invoices, credit notes, discounts and payments made on a supplier account according to the supplier. Statements show all transactions and the total invoiced between a certain date range.
You and your supplier should agree on the following:
-the entries on the supplier statement. All the items which appear on both the statement as well as your books can be matched according to matching rules with tolerances acceptable to both parties, and these are now eliminated from the reconciliation process.
-all credits and early settlement discounts can be taken into account as part of the reconciliation.
-no discrepancies. Errors can occur for many reasons. An invoice, credit note, payment, adjustment or a discount may have differences in the accounting records of one of the two businesses.
Not so long ago all supplier statements were processed manually (ticking off paper statements or using VLOOKUP’s in Excel!). The statements were received at separate locations and all reconciliations were done manually outside of SAP. Matching to open & cleared items, held documents, parked documents, the GR/IR account and linked customers was problematic. Companies were unable to reconcile all their vendors due to the time it took process. The result is that organisations do not find it practical or possible to reconcile every supplier, and therefore focus their time on their largest or most important suppliers.
BEST provides an affordable end to end solution in SAP which allows for faster and touchless processing together with high employee and supplier adoption. Not only are your employees happier but it improves your employee and supplier collaboration with less queries. Instead of only reconciling your top/larger suppliers you are now able to reconcile all your suppliers providing that you receive a statement from them.
So, while it’s true that my idea of perfect and your idea of perfect may be varied, we can all agree that technology continues to change the accounts payable role in your financial shared service centre. Accounts payable and shared services are increasingly being required to undertake more statement reconciliation as part of their control processes. Automate the process, remove manual repetitive tasks and focus on exceptions to reconcile all company statements.