What Is a Vendor Statement? The Complete AP Guide

A vendor statement is a supplier-issued document that summarizes all transactions between a vendor and buyer over a defined period, listing invoices, payments received, credits applied, and the outstanding balance. AP teams rely on vendor statements to reconcile their own records against the supplier's ledger and catch discrepancies like missing invoices or unapplied payments.

So what is a vendor statement in practice, and how should your AP team actually work with one? This guide breaks down the specific data fields a vendor statement contains, how it differs from invoices, purchase orders, and credit notes, and when and why suppliers send these documents. You will also find a step-by-step reconciliation process and a framework for resolving the most common discrepancies that surface during statement review.

One important clarification first: the term "vendor statement" means something entirely different in Australian property law. The next section draws that line before breaking down the document itself.

Vendor Statement Definition and Purpose

A vendor statement is a periodic summary document issued by a supplier to a buyer that lists every transaction between the two parties over a defined period, typically one calendar month. It captures invoices raised, payments received, credit notes applied, and any adjustments, then presents the outstanding balance the supplier believes the buyer owes. You may also see this document called a supplier statement, an account statement, or a statement of account. These terms are interchangeable and all refer to the same document.

The primary purpose of a vendor statement is straightforward: it gives your AP team a supplier-side record of the account so you can verify that your own books match. When a supplier sends you a statement showing three unpaid invoices totaling $14,200 and your ledger shows the same three invoices at the same amounts, you have confirmation that both sides agree. When the numbers differ, you have a starting point for investigation.

A note on terminology: If you arrived here searching for "vendor statement" and expected information about property transactions, you may be thinking of the Section 32 vendor's statement used in Australian property law. That is a completely different document, a legal disclosure required during property sales in certain Australian states. This guide covers vendor statements exclusively in the accounts payable and accounting context.

What makes a vendor statement distinct from other AP documents is its role as an external control document. An invoice requests payment for a single transaction. A vendor statement, by contrast, aggregates all transactions over a period and presents the supplier's view of the entire account balance. It is not a payment request. It is a reconciliation tool, a mirror held up to your own records so you can confirm accuracy or catch errors before they compound.

Think of it this way: invoices tell you what to pay. A vendor statement tells you where you stand with that supplier across everything, paid and unpaid, credited and adjusted, all on one document.

What Data Does a Vendor Statement Contain?

Vendor statements vary in format from one supplier to the next, but most contain a standard set of data fields. Knowing what each field represents helps AP staff and accountants read these documents quickly and spot errors before they compound. Here is a field-by-field breakdown of what a typical vendor statement shows.

Statement date and statement period. The statement date is the date the supplier generated the document. The statement period defines the date range the statement covers, for example 1 March to 31 March. Together, these two fields establish the time window for every transaction listed below them.

Supplier details. This block identifies the vendor issuing the statement. It typically includes the company name, registered address, phone number or email contact, and tax identification number (such as an EIN or VAT number). These details allow the buyer to confirm the statement came from a legitimate, known supplier.

Customer details. The buyer's information appears near the top as well. Expect to see the buyer's company name, the account number the supplier has assigned to the buyer, and the billing address on file. The account number is particularly important because it ties the statement to the correct ledger on the supplier's side.

Opening balance. This is the amount outstanding at the start of the statement period, carried forward from the previous statement. It represents every unpaid invoice, unapplied credit, and unresolved adjustment that existed before the current period began. If the opening balance does not match what the buyer's records show as owed to that supplier at period start, a discrepancy exists that needs investigation.

Transaction lines. The transaction section is the core of the document. It lists every financial event between the buyer and supplier during the statement period. Each line typically includes one of the following:

Invoice numbers, invoice dates, and invoice amounts for goods or services billed during the period
Payment references and payment amounts for remittances the supplier received and applied
Credit note numbers and credit amounts for returns, pricing corrections, or other reductions
Debit note or adjustment entries for any other modifications to the account balance

Transaction lines are usually listed in chronological order, giving a running account of activity from the first day of the statement period to the last.

Closing balance. The closing balance is the total amount outstanding at the end of the statement period. It is a calculated figure, not an arbitrary number. The supplier arrives at it using a straightforward formula:

Opening Balance + Invoices Issued - Payments Received - Credits Applied = Closing Balance

This formula makes the document's logic concrete. If the buyer independently calculates the same closing balance using their own records, the two accounts are in agreement. If the figures diverge, the transaction lines provide the audit trail needed to find the source of the difference.

Aging breakdown. Many vendor statements include an aging summary that categorizes the outstanding balance by how long each portion has been unpaid. A typical aging breakdown groups amounts into buckets: current (not yet due), 1 to 30 days overdue, 31 to 60 days overdue, 61 to 90 days overdue, and 90+ days overdue. This breakdown gives both parties immediate visibility into payment health without requiring a separate aging report.

Payment terms and remittance instructions. The final section specifies where and how to send payment. This may include bank account details for wire transfers, a mailing address for checks, accepted payment methods, and the agreed payment terms (such as Net 30 or Net 60). Having remittance instructions on the statement itself reduces back-and-forth when AP teams are ready to pay.

How a Vendor Statement Differs from an Invoice, Purchase Order, and Credit Note

Vendor statements are often confused with invoices, but the two documents serve fundamentally different purposes. An invoice requests payment for a single transaction. A vendor statement summarizes an entire account relationship over a defined period, capturing every invoice, payment, credit, and adjustment in one view.

The following table breaks down how vendor statements compare to the other core documents AP teams handle daily.

Document Type	Issued By	Purpose	Frequency	Key Content
Vendor statement	Supplier	Summarizes account activity and outstanding balance over a period	Monthly or on request	All invoices, payments, credits, adjustments, and running balance
Invoice	Supplier	Requests payment for a specific transaction	Per transaction	Line items, amounts, payment terms, and due date for one sale
Purchase order	Buyer	Authorizes a purchase before goods or services are delivered	Per order	Ordered items, quantities, agreed prices, and delivery terms
Credit note	Supplier	Reduces the amount owed due to returns, errors, or pricing adjustments	As needed	Original invoice reference, credit amount, and reason for the credit
Remittance advice	Buyer	Confirms that payment has been sent	Per payment	Payment amount, invoice references covered by the payment, and payment method

The critical distinction is scope. A vendor statement is the only document in this group that provides a full view of the entire account balance between buyer and supplier. Every other document listed above covers a single transaction or event. The vendor statement ties them all together, showing how individual invoices, credits, and payments roll up into what is currently owed.

When comparing a vendor statement vs invoice in detail, the difference becomes even clearer. An invoice captures one moment in the commercial relationship: a specific sale with specific line items and a specific due date. Readers who want a deeper look at invoice anatomy can explore a guide on what invoices contain and how they work. Invoices themselves come in several forms, including standard, credit, debit, and proforma variants. A guide on different types of invoices in accounting covers the full taxonomy.

Purchase orders sit on the opposite side of the transaction from invoices. The buyer issues a purchase order to authorize a purchase; the supplier then fulfills the order and issues an invoice to collect payment. These two documents should reference each other, and mismatches between them are a common source of AP disputes. For a detailed look at how purchase orders and invoices relate to each other, a dedicated comparison guide walks through the full workflow.

Credit notes and remittance advice round out the document set. A credit note flows from supplier to buyer and reduces what is owed. Remittance advice flows from buyer to supplier and confirms what was paid. Both appear as line items on the vendor statement, which is exactly why the statement functions as the master reconciliation document for the account.

When and Why Suppliers Send Vendor Statements

Vendor statements do not arrive at random. Each one is triggered by a specific business event on the supplier's side, and understanding those triggers helps AP teams anticipate incoming documents and act on them promptly.

Common Triggers

Regular monthly cycle. Most suppliers generate statements automatically at the close of each month or billing period. This is standard accounts receivable housekeeping. Whether or not a balance is overdue, the supplier's system produces a statement summarizing all activity for the period and sends it to every active account.

Overdue balances. When an account carries aged balances, typically at 30, 60, or 90+ days past due, the supplier sends a statement as a formal reminder. These statements often accompany or replace informal payment follow-ups, giving the buyer a complete picture of what remains outstanding and how long each amount has been open.

Account review or audit. Suppliers periodically review their own receivables ledger, especially when preparing for quarter-end or year-end close. During these reviews, they may issue statements to confirm balances with their customers and flag any unresolved items before finalizing their own books.

Payment dispute. When a buyer questions a charge, claims a payment was already sent, or disputes a line item, the supplier sends a statement to establish their official record of the account. The statement serves as documentary evidence of what the supplier believes is owed, paid, and credited.

On request. AP teams can request a vendor statement from any supplier at any time. This is common during internal reconciliation cycles, pre-audit preparation, or when onboarding a new AP team member who needs to verify account status. Most suppliers will generate one within a few business days.

Delivery Formats

How a vendor statement reaches the AP team depends on the supplier's size and systems. The format matters because it determines how much manual work is involved in extracting data for reconciliation:

Physical mail. Traditional paper statements sent through postal mail. Still common with smaller or legacy suppliers who have not digitized their accounts receivable workflows.
Email (PDF attachment). The most prevalent format today. Suppliers generate the statement from their accounting system and email it as a PDF, often from an automated or shared mailbox.
Supplier portal download. Some larger suppliers operate self-service portals where buyers can log in and download current or historical statements on demand, without waiting for the supplier to send one.
EDI (Electronic Data Interchange). Used by enterprise suppliers for automated statement delivery within larger procurement systems. EDI transmits structured data directly between the supplier's and buyer's systems, bypassing manual document handling entirely.

Vendor Statements vs. Internal Aging Reports

An aging report generated internally by the AP team is a different document. The aging report is buyer-generated, compiled from the buyer's own ledger and payment records. A vendor statement is supplier-generated, compiled from the supplier's receivables records. The two documents reflect the same account from opposite sides of the transaction. Comparing them against each other is a core part of the reconciliation process.

How AP Teams Use Vendor Statements for Reconciliation

Vendor statement reconciliation is the process of comparing a supplier's record of account activity against the buyer's own accounts payable records for the same period. The goal is to confirm that both parties agree on what has been invoiced, paid, and credited, and to surface any differences before they affect financial reporting or cash flow.

The standard reconciliation workflow follows a consistent sequence that AP teams repeat for each supplier on a regular cycle.

1. Obtain the vendor statement. Some suppliers send statements automatically at the end of each month or quarter. For suppliers that do not, request one directly. The statement should cover the same period you plan to reconcile.

2. Pull the corresponding AP records. From your accounting system, generate a supplier ledger report for the same vendor and the same date range. This report should list all recorded invoices, credit notes, and payments.

3. Compare the closing balance. Check the ending balance on the vendor statement against the AP ledger balance for that supplier. If the two figures match, the reconciliation is complete for that period, and no further investigation is needed.

4. If balances differ, perform a line-by-line comparison. Match each transaction on the vendor statement against the corresponding entry in your AP ledger. For every invoice, payment, and credit note, verify that the invoice number, date, and amount align between both records.

5. Identify discrepancies. Flag any transaction that appears on one record but not the other, or where the recorded amount differs. Common examples include invoices the supplier has issued but your team has not yet received, payments you have made that the supplier has not yet applied, or credits that only appear on one side of the ledger.

6. Investigate and resolve each discrepancy. Determine whether the difference stems from a timing issue, a data entry error, a missing document, or a genuine dispute. The next section covers the most frequent discrepancy types along with specific resolution steps for each.

7. Document the reconciliation outcome. Record what was compared, what discrepancies were found, and how each was resolved. This documentation creates an audit trail that supports both internal controls and external audit requirements.

This process matters because errors in AP records tend to compound when left undetected. A Gartner survey of nearly 500 accounting professionals found that 59% make several financial errors per month, with capacity constraints from manual processes and growing workloads cited as the primary cause. Regular vendor statement reconciliation is one of the key controls that catches these errors early, before they distort financial statements, trigger duplicate payments, or damage supplier relationships.

Beyond error detection, the aging breakdown on a vendor statement also supports payment prioritization. When cash flow is constrained, AP teams use the aging buckets to identify which supplier balances are most overdue and allocate payments accordingly, addressing 90+ day balances before current ones to avoid late fees and preserve supplier terms.

For teams looking for a deeper guide on the full reconciliation workflow, including three-way matching and automation strategies, a dedicated guide on the invoice reconciliation process covers those topics in detail.

Common Vendor Statement Discrepancies and How to Resolve Them

Discrepancies between vendor statements and internal AP records surface regularly. A typical AP team managing 50 suppliers, each sending monthly statements covering 10 to 50 transaction lines, will encounter at least a handful of mismatches per reconciliation cycle. Knowing which types appear most frequently, and how to resolve each one, turns reconciliation into a repeatable process rather than ad hoc detective work.

Missing Invoices

An invoice appears on the vendor statement but has no corresponding entry in the buyer's AP records. This is one of the most frequent discrepancies, and the causes range from mundane to problematic. The invoice may have been legitimately issued but lost in transit, routed to the wrong department, or stuck in an email inbox that no one monitors.

Resolution: Contact the supplier and request a copy of the invoice. Once received, verify that the goods or services were actually ordered and delivered. If the invoice is valid, record it in AP and schedule it for payment. If the invoice was never authorized, flag it for further investigation before accepting the charge.

Unapplied Payments

The buyer's records show a payment was made, but the vendor statement still lists the invoice as open, or the payment appears for a different amount. This often happens when the payment was sent without complete remittance details, making it difficult for the supplier's AR team to match the payment to the correct invoice.

Resolution: Confirm that the payment was sent with the correct remittance information, including invoice numbers, payment amount, and account references. Share payment confirmation with the supplier, such as a bank reference number or remittance advice document, so their AR team can locate and apply the payment to the correct invoices.

Duplicate Charges

You notice invoice #4521 for $3,200 appears on the vendor statement twice, or the same amount shows up under two different invoice numbers. This typically results from a billing system error on the supplier's side, a re-sent invoice that was accidentally treated as new, or a data entry mistake on either end.

Pull the original invoices for both entries and compare invoice numbers, dates, line items, and amounts. If the charges are genuinely duplicated, contact the supplier with the evidence and request a credit note to reverse the extra charge. Track the credit note through to the next statement to confirm it was applied.

Pricing or Amount Differences

An invoice amount on the vendor statement does not match the amount recorded in AP. The difference might be a few cents from a rounding discrepancy or a significant sum from a pricing disagreement.

Resolution: Retrieve the original purchase order, the goods receipt (or proof of service delivery), and the invoice. Compare all three documents to identify where the discrepancy originated. Common root causes include a price change that was applied to the invoice but not reflected in the PO, a quantity adjustment after delivery, a discount that was agreed upon verbally but not documented, or a tax calculation difference between jurisdictions. Once the source is identified, either adjust the AP record or request a corrected invoice from the supplier.

Credit Notes Not Applied

The supplier issued a credit note, the buyer recorded it in AP, but the credit does not appear on the vendor statement. The outstanding balance shown on the statement is therefore higher than what the buyer's records reflect.

Resolution: Contact the supplier with the credit note number, date, and amount. Request that they apply the credit to the account. In some cases the credit note was issued by one department but never forwarded to the AR team responsible for generating statements. Follow up on the next statement cycle to verify the credit appears.

Timing Differences

Not every discrepancy signals an error. A payment sent near the statement cut-off date may not have reached the supplier before the statement was generated. The payment shows in your ledger but not on the statement, creating an apparent mismatch that will resolve itself in the next cycle.

Check the payment date against the statement period end date. If the payment was sent within a few business days of the cut-off, note it as a timing difference and verify on the next statement that it appears. If it still does not show after two statement cycles, escalate using the unapplied payment process described above.

Build an Audit Trail

After identifying and resolving each discrepancy, maintain a written record of what was found, what caused it, and how it was resolved. This documentation serves as an audit trail that protects both the buyer and the supplier. Auditors and internal reviewers can trace every adjustment back to its source, and recurring issues with a specific supplier become visible over time, enabling targeted process improvements.

Proactive reconciliation and consistent discrepancy resolution do more than keep the books accurate. They reduce the risk of supplier escalations and late-payment penalties, because discrepancies are caught and resolved within one statement cycle rather than compounding across several.

Putting Vendor Statements to Work

Every concept covered in this guide points toward one goal: keeping your AP records accurate and your supplier relationships healthy. Here are the core takeaways:

A vendor statement is a supplier-issued summary of all transactions and the outstanding balance for a defined period, serving as the definitive external reference for what a supplier believes you owe.
The document follows a standard structure: supplier and buyer details, opening balance, individual transaction lines (invoices, payments, credits, adjustments), closing balance, and often an aging breakdown that segments overdue amounts by 30-, 60-, and 90-day buckets.
Vendor statements differ from invoices in scope and function. An invoice requests payment for a single transaction; a vendor statement aggregates every transaction across a period, making it the primary external control document for verifying your AP ledger.
Suppliers typically send statements on a monthly cycle, on request, or when balances become overdue, each scenario reflecting a different business need.
AP teams use vendor statements for reconciliation by comparing the supplier's record line by line against internal AP data, catching discrepancies before they compound into larger financial problems.
The most common discrepancies, including missing invoices, unapplied payments, duplicate charges, and timing differences, all follow standard resolution procedures that become routine once your team knows what to look for.

With those fundamentals in place, the following steps will strengthen your vendor statement process:

Set a recurring reconciliation schedule. Request statements from high-volume and high-balance suppliers at least monthly. For lower-volume suppliers, quarterly reconciliation is a reasonable starting point.
Prioritize by risk and volume. Focus reconciliation effort on suppliers carrying the largest outstanding balances or generating the most transaction activity, where undetected errors carry the greatest financial exposure.
Document every resolution. When discrepancies surface, record the investigation steps, communications, and outcome. This audit trail protects your team during internal or external audits and prevents the same issue from being re-investigated later.
Reduce manual matching effort at scale. For AP teams processing high volumes of vendor-referenced documents such as invoices, credit notes, and purchase orders, AI-powered invoice data extraction tools can cut the manual work involved in matching document data against vendor statement records, freeing your team to focus on exception handling and supplier communication rather than data entry.