Documents for Business
In excess of 1,000 customisable documents covering every conceivable business issue.Introduction to this document
Purchase ledger review
With computerised accounting systems, it’s easy for the purchase ledger to appear to be in good order. The purchase ledger control account will correspond with the total amounts showing as due on the individual supplier accounts. However, the purchase (or suppliers’) ledger can become messy if not regularly reviewed and reconciled.
Suppliers statements
You can reconcile individual supplier accounts to the latest supplier’s statement (request a statement from suppliers who do not usually send one). This process may reveal missing supplier invoices which you can then request copies of. This approach is better than asking them to confirm a balance owed as they may take advantage of you if it's higher than you actually owe.
Where you have reconciled the purchase ledger balances to suppliers' statements, you can be very confident in those balances and can turn your attention to balances that don’t reconcile and those with suppliers for whom you have not received a statement.
Use our Purchase Ledger Review document to summarise differences over what is due and to keep track of which ones have yet to resolved.
Debit balances
One sign that all is not right in your purchase ledger is the existence of overal debit balances with certain suppliers or debit balances showing up within certain suppliers on detailed ageing reports. Record these on your purchase ledger review document to be investigated.
If do you find debit balances, this means either a payment has been made without a corresponding invoice having been recorded, an overpayment has been made to the supplier, or there have been mis-postings in your ledgers of invoices or payments between different suppliers. For example, you can resolve these by tracing queried payments from the purchase ledger to the bank to confirm that they are correctly recorded and check that payment is not still shown as outstanding on bank reconciliation.
