Blog Post
How to Reconcile Vendor Statements with Automated System
Moving from manual "tick and tie" to an automated system is the single biggest efficiency gain an Accounts Payable (AP) team can make. But how exactly does it work? This guide breaks down the technical steps of how to reconcile vendor statements using modern automation software, ensuring you get the most out of your investment.
Phase 1: Data Ingestion & Digitization
The first hurdle in any automated system is getting the data in. Vendors send statements in various formats: PDF, Excel, CSV, or even paper.
How it works: You configure a dedicated email alias (e.g., statements@yourcompany.com). The automated system monitors this inbox. When an attachment arrives, it uses Optical Character Recognition (OCR) to "read" the document. It extracts key fields: Invoice Date, Invoice Number, Amount, and Currency. This converts unstructured data into a structured table ready for matching.
Phase 2: The Matching Logic Configuration
Once the data is in, the "brain" of the system takes over. You need to configure the logic that tells the system what constitutes a match.
1. Exact Match Rules
Configure the system to look for 100% matches on [Invoice #] AND [Amount]. This typically clears 80% of line items instantly.
2. Fuzzy Match Rules
Vendors often format invoice numbers differently than your ERP (e.g., "INV-001" vs "001"). Set up "fuzzy" rules that strip special characters or leading zeros to find matches that strict rules would miss.
3. Tolerance Thresholds
Define a tolerance for small discrepancies. For example, "If the difference is less than $0.10, auto-match and write off the difference to a rounding expense account." This prevents your team from chasing pennies.
Phase 3: Automated Exception Handling
The real value of an automated system lies in how it handles what doesn't match.
Scenario: Missing Invoice. The vendor statement lists an invoice that isn't in your ERP.
Manual Way: AP clerk emails the vendor.
Automated Way: The system detects the missing invoice and triggers an automated email template to the vendor: "Please provide a copy of invoice #1234." The invoice status is tracked in a dashboard.
Implementation with Reconwizz
Implementing Reconwizz for vendor reconciliation is designed to be low-friction. We integrate directly with your ERP (NetSuite, SAP, etc.) to pull your open AP ledger in real-time.
By following these configuration steps, our clients typically reduce their AP workload by 70% within the first month.