Reconciliation
The process of comparing two sets of financial records to ensure they are consistent and accurate.
Definition
Reconciliation in AP involves comparing internal records (AP ledger, payment records) against external records (vendor statements, bank statements) to verify accuracy and identify discrepancies. Regular reconciliation catches errors, detects fraud, and ensures financial statements are reliable.
Why It Matters
Without reconciliation, errors and fraud can go undetected for months. Regular reconciliation ensures AP records are accurate, vendor balances are correct, and financial statements are reliable.
Examples
Vendor statement reconciliation
Comparing a vendor's monthly statement showing $45,000 outstanding against your AP ledger showing $42,000. The $3,000 difference needs investigation.
AP subledger to GL
Reconciling the AP subledger total to the general ledger AP balance to ensure all invoices are properly recorded.
How Nexus AP Helps
Nexus AP automates vendor statement reconciliation and subledger-to-GL reconciliation, identifying discrepancies instantly.
Start Free TrialFrequently Asked Questions
How often should AP be reconciled?
Vendor statements should be reconciled monthly. AP-to-GL reconciliation should happen at every month-end close. Bank reconciliation should be at least monthly.
What are common reconciliation discrepancies?
Timing differences (checks in transit), missing invoices, duplicate entries, unrecorded credits, and posting errors.
Category
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