What Is Vendor Reconciliation Explained in Plain English?

For an entrepreneur, the biggest form of cash outflow is a payment made to vendors. To deal with such a huge amount of monetary payments in a systematic manner, it is best that reconciliation of vendor statements is done. If you are asking “what is vendor reconciliation?” it is time that apart from reconciling your accounts on a regular basis, there are other areas you should be concerned.

Within the supply chain, late processing of invoices can be a major issue. This not only leads to late payment and lag in the chain, but certain discrepancies may arise as well. It is to prevent these that reconciling vendor statements are important, since keeping good finances is essential to have everything healthy, as ID theft victims do have great chances to clear up the name. At least as stated in that ChexSystems removal guide (I didn’t tried it personally), so using these systems can help keep everything clean.

“If cash flow is sanity, revenue is termed as vanity; CASH is surely the king!”

What is vendor reconciliation?

The document availed from the account of a vendor stating unpaid voices at a particular period is known as vendor statement. It has certain unclear aspects within it as payments and credit notes. The concept of reconciliation implies, matching of invoices and other documents from the vendor’s side to that of your own.

Why should vendor statements be reconciled?

Once the query what is vendor reconciliation, the other point that surfaces are why should these statements be reconciled? Well, to answer that, noting certain points is important.

· The first notable point is ensuring of early settlement of monetary issues. Therefore, vendors will not have to wait for months to get payments and
therefore trade can be carried on in the same manner.

· Those vendors who have not reported and having discrepancies in their account can be easily determined. This will save the company from future losses.

· It will prevent any manner of duplicate payment (in case, your vendor’s pricing master data is wrong) and thereby validate balance sheet of the company.

· This system at the very end helps in identifying those issues that are disturbing both your systems: yours and your vendor’s. By presenting a detailed report, vendor queries will be solved and your control over your vendor ill increase.

Given such a scenario, taking help from an automated process will be a better option. Therefore, the system in this case to assist you is SAP, an automated process to keep track of vendor reconciliation statements. Clearly, vendor reconciliation now has an added advantage of using automated process to deal with it.

How is SAP useful in dealing with vendor reconciliation process?

Standard SAP does not allow functions to reconcile statements. Therefore a specially developed BEST software is integrated into this module. This has additional reports and screens along with certification as per German standards. While buying, it is imperative that you keep track of organizations that are professionals in selling this SAP software.

· This automated SAP process saves finance by avoiding interfaces that are presented by vendor master. So, all credits and discounts are added on at the same time, saving money as you can see from this Business Banking.

· There is an option to balance SAP payment to reconciliation, therefore in case, a specific vendor lacks enough information to provide that ideal reconciliation report, a user cockpit present allows reprocessing of such information.

· Not only creditor document but the whole procurement chain can be matched in this SAP format. This includes those goods which do not have an invoice/those invoices that are in process in VIM tools.

Have you got an answer to what is vendor reconciliation? Well, make sure that you get certain add-on tools in this automated process to enhance these statements. A visit to the professional is a must!