Vendor Reconciliation GL Account

What is Vendor Reconciliation GL Account?

Reconciling an account often means proving or documenting that an account balance is correct. For example, we reconcile the balance in the general ledger account Cash in Checking to the balance shown on the bank statement. The objective is to report the correct amount in the general ledger account Cash in Checking. You will often need to adjust the general ledger account balance for items appearing on the bank statement that were not entered in the general ledger account.
I recall being asked to reconcile the general ledger account Freight Payable. What I needed to do was provide documentation that the balance in Freight Payable was proper. I proceeded to look at the shipments of recent sales and then determined how much we would be obligated to pay for the freight on those sales. We then adjusted the balance in Freight Payable to my documented amount. This reconciliation was done to have the correct account balance and to provide the outside auditors with documentation which could easily be reviewed.
I also reconciled the balance in Utilities Payable by computing the daily cost of each utility that the company used. The cost per day was then multiplied by the number of days since the last meter reading date shown on the utility bills already entered in our accounting system. We then adjusted the Utilities Payable account balance to be equal to the documented amount.              
Vendor reconciliation is A statement received from vendor which contains details of invoices of that vendor for a particular period, vendor wants to confirm that these invoices has been paid or not, the balance vendor has open for this invoices should match the payment made to that vendor.
Each month when you receive vendor or credit card statements, you should reconcile the individual statements to your accounts payable. If you use a computerized system, you should have the ability to print or display a report for each specific vendor that shows activity for the time period you select. Compare the vendor's statement to your report. Using the statement as a worksheet, match all invoices and payments shown on the statement to your records and place a check by those that agree. Make sure that the amounts agree, as well as the reference numbers and dates. Examine the remaining items. You might have mailed a check that the vendor had not received by the statement date, or the vendor might have mailed an invoice that you never received or forgot to enter into your computer. If necessary, call the vendor to obtain copies of invoices or to question why checks you sent were not posted.
If your software allows you to enter invoices without posting them to the general ledger, make sure that all invoices have been posted; if you cannot post them, make a list or print a report detailing these transactions. Next, print an accounts payable aging report for the month you are reconciling; if you have invoices that were not posted to the general ledger, subtract them from the total on your aging report. Do not include invoices that you have not yet entered into the computer. Print a trial balance from your general ledger module. Compare the total for accounts payable on the general ledger to your adjusted total from your aging report. Ideally, the two numbers agree and no further action is needed.

If not, print the general ledger detail for your accounts payable account. Look for journal entries that were manually posted that affected your accounts payable and verify that they are correct. If the problem remains, it is possible that an invoice could have been incorrectly entered to affect an account other than payables. Depending on your software, you can examine the posting logs that were printed after invoices were posted to the general ledger for errors or print an accounts payable detail report to examine for errors. Your software may also require you to reset the accounting period monthly when you close the books; check to make sure that the correct period is shown for your general ledger.