Mismatched Transactions

What are Mismatched Transactions?

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Mismatched Transactions in Accounts Payable (AP)

Mismatched transactions occur when there are discrepancies between a company's accounts payable records and a supplier’s statement, invoice, or purchase order. These mismatches can arise due to differences in amounts, missing invoices, incorrect payments, or data entry errors.

Common Causes of Mismatched Transactions

  1. Invoice vs. Purchase Order Mismatch

    • The invoice amount does not match the purchase order (PO).
    • The quantity billed is higher or lower than the PO.
    • Pricing differences between the invoice and PO.

  2. Invoice vs. Goods Received Note (GRN) Mismatch

    • The goods or services received do not match what was billed.
    • Items are billed but not yet received (timing issue).
    • The received quantity differs from the invoiced quantity.

  3. Payment vs. Invoice Mismatch

    • Incorrect payment amounts (overpayment or underpayment).
    • Payments applied to the wrong invoice.
    • Duplicate payments made for the same invoice.

  4. Supplier Statement vs. AP Ledger Mismatch

    • Invoices missing from AP records or vice versa.
    • Payments recorded in AP but not reflected in the supplier’s statement.
    • Credit notes or adjustments not correctly applied.

  5. Currency Exchange Rate Differences

    • If transactions are in foreign currency, exchange rate fluctuations can cause mismatches.

  6. Tax or Discount Discrepancies

    • VAT, GST, or other taxes incorrectly applied.
    • Supplier applied a discount that is not recorded in AP.

How to Identify and Resolve Mismatched Transactions

  1. Perform Regular Reconciliations – Compare supplier statements with the AP ledger to catch discrepancies early.
  2. Check Supporting Documents – Review invoices, purchase orders, GRNs, and payment records.
  3. Communicate with Suppliers – Contact the supplier to clarify any inconsistencies.
  4. Adjust AP Records if Necessary – Correct errors in data entry, payment application, or invoice recording.
  5. Implement 3-Way Matching – Match the invoice, PO, and GRN before processing payments to reduce mismatches.
  6. Use Automated AP Software – Automation can flag mismatches and reduce manual errors.

Mismatch Resolution Checklist

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Mismatched Transactions Resolution Checklist (Accounts Payable)

Use this checklist to systematically resolve mismatched transactions between supplier statements, invoices, payments, and purchase orders.

1. Identify the Mismatch Type

✅ Check if the issue is related to:

  • ❏ Invoice vs. Purchase Order (PO) Mismatch
  • ❏ Invoice vs. Goods Received Note (GRN) Mismatch
  • ❏ Payment vs. Invoice Mismatch
  • ❏ Supplier Statement vs. AP Ledger Mismatch
  • ❏ Currency Exchange Rate Discrepancy
  • ❏ Tax or Discount Difference

2. Compare Documents and Verify Details

✅ Review supporting documents for accuracy:

  • ❏ Match the invoice with the corresponding PO (check pricing, quantity, and terms).
  • ❏ Verify GRN details to confirm goods or services were received as per the invoice.
  • ❏ Check payment records against invoice numbers and amounts.
  • ❏ Compare supplier statements with AP ledger balances and transactions.
  • ❏ Ensure tax rates and discounts are correctly applied.

3. Investigate and Classify the Mismatch

✅ Determine the root cause of the mismatch:

  • ❏ Data entry error (incorrect amount, duplicate entry, wrong invoice number).
  • ❏ Supplier error (incorrect pricing, missing credit note, duplicate invoice).
  • ❏ Timing issue (payment or invoice processed late, pending delivery).
  • ❏ Exchange rate fluctuation (affecting foreign currency transactions).
  • ❏ Unrecorded adjustments (credits, returns, early payment discounts).

4. Communicate with Relevant Parties

✅ Contact the appropriate department or supplier to resolve the issue:

  • ❏ Internal AP Team – If errors are found in data entry or system processing.
  • ❏ Procurement Team – If the issue is related to a PO mismatch.
  • ❏ Receiving Department – If GRN discrepancies exist.
  • ❏ Supplier – To confirm missing or incorrect invoices, payments, or credits.

5. Correct and Update Records

✅ Make necessary adjustments in the AP system:

  • ❏ Adjust invoice records if incorrect amounts were recorded.
  • ❏ Issue a payment correction if underpayment or overpayment occurred.
  • ❏ Apply missing credit notes or request updated invoices from the supplier.
  • ❏ Request a revised supplier statement after corrections are made.

6. Prevent Future Mismatches

✅ Implement process improvements:

  • ❏ Use 3-way matching (invoice, PO, and GRN verification before processing).
  • ❏ Automate AP reconciliation to flag discrepancies early.
  • ❏ Standardize invoice processing guidelines for the AP team.
  • ❏ Schedule periodic supplier reconciliations to catch errors before they escalate.
  • ❏ Maintain open communication with suppliers to align records.

Accounts Payable Reconciliation Report

Report Date: [Insert Date]
Prepared By: [Your Name]
Supplier Name: [Supplier Name]
Supplier Account Number: [Supplier Account Number]

1. Summary of Reconciliation

  • Period Covered: [Start Date] to [End Date]
  • Opening Balance: [Amount]
  • Total Invoices Received: [Amount]
  • Total Payments Made: [Amount]
  • Credit Notes Applied: [Amount]
  • Closing Balance According to Supplier Statement: [Amount]
  • Closing Balance According to AP Ledger: [Amount]
  • Variance: [Amount]

2. Reconciliation Details

Date Invoice No. PO No. GRN No. Supplier Amount AP Ledger Amount Variance Status
[Date] [Invoice #] [PO #] [GRN #] [Amount] [Amount] [Variance] [Resolved/Pending]
[Date] [Invoice #] [PO #] [GRN #] [Amount] [Amount] [Variance] [Resolved/Pending]
[Date] [Invoice #] [PO #] [GRN #] [Amount] [Amount] [Variance] [Resolved/Pending]

3. Breakdown of Mismatched Transactions

A. Missing Invoices

Invoice No. Supplier Amount AP Ledger Amount Reason for Discrepancy Resolution
[Invoice #] [Amount] [Amount] [Reason] [Action]
[Invoice #] [Amount] [Amount] [Reason] [Action]

B. Payment Discrepancies

Payment Reference Supplier Statement Amount AP Ledger Amount Variance Resolution
[Payment Ref] [Amount] [Amount] [Amount] [Action]
[Payment Ref] [Amount] [Amount] [Amount] [Action]

C. Credit Notes Not Applied

Credit Note No. Supplier Amount AP Ledger Amount Variance Resolution
[Credit Note #] [Amount] [Amount] [Amount] [Action]
[Credit Note #] [Amount] [Amount] [Amount] [Action]

4. Resolution Actions & Next Steps

  • Supplier Communication Date: [Date]
  • Supplier Contact Person: [Name]
  • Actions Taken: [Details of communication and resolutions]
  • Pending Items: [List of unresolved issues and next steps]
  • Expected Resolution Date: [Date]

5. Final Reconciliation Outcome

  • Reconciled Balance: [Amount]
  • Outstanding Issues: [Yes/No]
  • Further Actions Required: [Yes/No]
  • Additional Notes: [Any important details]

Prepared By: [Your Name]
Reviewed By: [Reviewer Name]
Approval Signature: _______________
Date: [Insert Date]

This report ensures transparency and accuracy in the reconciliation process, helping to prevent future mismatches and maintain supplier relationships effectively.