What is Customer Reconciliation?

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• What is Customer Reconciliation and Vendor
  Reconciliation?
• Reconciling customer statements ensures that
  there are no inaccuracies or mistakes in what the
  vendor is charging and the inventory, services
  or supplies you received. Statements mostly
  arrive at the same time each month. In simple
  terms, reconciliation is matching the statements
  items with your invoices.
• What is Customer Reconciliation?
• Vendor reconciliation is a statement received
  from the vendor which contains details of
  invoices of the vendor for a particular period.
  This is a process of comparing the outstanding
  customer balance or bills to the accounts
  receivable as recorded in the general ledger. It
  is part of accounting activity and is usually
  conducted at the month-end before issuance of
  monthly financial statements. It also contains
  unclear items such as payments and credit notes.
• Steps to reconcile customer/vendor statement
• Gather your invoices
• Organize your invoices of the vendor by date. If
  you use a computer to assist your accounting
  needs, you can perform your reconciliation and be
  sure to mark the included invoices paid in your
  computer when you finish.
• Inspect the line items
• Match the line items to your invoices from the
  vendors statement. Usually, businesses reconcile
  invoices as soon as the shipment arrives. So
  your invoices must reflect the correct count and
  dollar amounts of each shipment.
• Place check marks on matched items
• Place check marks on your statement when the
  invoice matches the line items. For example, you
  have received an invoice of 12 computers for your
  business, then there must be a line item on the
  statement corresponding to that shipment. Compare
  statement invoice number for that item, and if
  they match place a check mark beside the
  statement item.

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• Lastly, add all the relevant invoices and compare
  the amount to the total of the statement. If the
  total amount doesn't match- check the
  calculations again. Even if it doesn't match,
  call the vendor's accounts receivable department
  and ask for help locating the error.
• Benefits of customer reconciliation
• Customer reconciliation is of great importance as
  it affects the revenue of the company. This is
  also required at the time of auditing. Following
  are the benefits
• It saves the revenue of the firm
• It facilitates internal auditor while auditing
  the account
• It helps in eliminating errors
• It helps to prevent the material inaccuracy in
  financial statements of the firm.
• It also identifies payments you made but that
  your vendor has not yet received or allocated,
  or discounts your vendor has not passed, or
  pricing claims and returns that have not yet
  been credited.
• Importance of reconciling vendor statements
• It ensures early settlement of discounts taken
• It prevents duplicate payment or overpayment
• It identifies procure to pay issues
• It also identifies vendor invoices or credit
  notes not processed or received
• It helps in identifying credits, payments or
  discounts not processed by the vendor.