What Is Reconciling an Accounts Payable Statement?

An accounts payable statement usually refers to an accounts payable control account. Reconciling an accounts payable statement is verifying that the accounts payable control account matches the accounts payable subsidiary accounts.

Description

• Accounts payable is an account used to track amounts that a company owes. The control account shows a total of all money owed. Accounts payable subsidiary account is a breakdown of all amounts owed by who they are owed to. The amount in the control account should be equal to the total amount of all accounts payable subsidiary accounts.

Process

• To reconcile the accounts payable, the control account balance is needed as well as the subsidiary account balances. The two amounts must balance. Another way of balancing this is to start with the beginning monthly balance of accounts payable. Add the total amounts purchased throughout the month and subtract any payments made on the account. This should also equal the ending balance in accounts payable. This amount is also verified with the subsidiary ledgers.

Purpose

• Balancing the accounts payable account helps find any errors that may have occurred. When items are transferred from the control account to the subsidiary ledgers, unintentional mistakes can occur. This also helps find errors caused by vendor mistakes.