Vendor credit reconciliation: from approval to application.

What are you actually reconciling?

Start with an approved expected credit: the supplier has accepted a return or another specifically agreed adjustment. Compare that expectation with the credit notes received. Then compare each note with the accounts-payable applications that use it. These are three separate events, with different owners and dates. A return shipment alone does not establish an approved financial entitlement.

A simple worked example

Suppose an approved return is worth EUR 1,000. Two credit notes arrive for EUR 400 and EUR 300. Together they cover EUR 700, leaving a EUR 300 difference to investigate. If EUR 200 of the first note has been applied, that note also has EUR 200 remaining. The missing portion and the unapplied balance refer to different stages. Neither is automatically cash recovered. Check document completeness, agreed values and settlement timing before approaching the supplier.

The three exceptions worth separating

A missing credit has no matching note in the agreed snapshot after the review window. A partial credit has matching notes whose total is below the expected amount. An unapplied credit has a balance remaining after its application window. Duplicates, overcredits and unclear references require a separate review: adding them to a savings claim would be misleading.

How VendorCredits checks a snapshot

The current engine uses exact supplier codes, document references and original currencies. It sums split credit notes and partial applications, calculates in whole minor units and links a finding back to its source rows. EUR and PLN are never added into one number. The reviewer sees the reason, evidence and next action, then records a decision. This is an agreed-export workflow; a live ERP connector is not included.

What your finance team receives

A review queue, a CSV of exceptions and a JSON evidence report provide a handoff for the person who owns the supplier relationship or AP ledger. The current workspace supports notes, review status and an activity trail. Closing a workflow item records a decision; it is not a payment, accounting entry or proof of settlement. Original documents remain the authority.

Start with a bounded review

Select suppliers and a historical period with a named finance owner. Agree which event each date represents, what counts as an approved credit and how earlier opening items will be included. Keep a sample of correctly settled records as a control. Count false positives and time spent preparing exports, as well as useful exceptions. A repeated review should earn its place in the month-end process.

Share only the agreed fields

Supplier names can be replaced with codes, while document links remain consistent. Dates, currencies and amounts are still needed for these checks and remain commercially sensitive. Use the data checklist and local preparation tool before discussing a transfer. The public demo is fictional; real-data processing requires a separately approved pilot.

Turn a reconciliation into a review handoff

For fictional RMA-DEMO-01, link approval E-01 for EUR 10,000 to credit C-01 for EUR 8,000 and application L-01 for EUR 5,000. Record the EUR 2,000 issuance difference separately from the EUR 3,000 application balance. The handoff identifies the source rows, the person responsible for each question and the next evidence to obtain. Use the worked review below to see the output before discussing a real snapshot.

The two questions

Your action checklist

1. Agree the supplier scope and as-of date.
2. Check the three exports before interpreting differences.
3. Keep each currency separate.
4. Preserve the source evidence and next action.

Practical questions