What is Vendor Statement?

Definition

Vendor Statement is a summary document provided by a vendor that details all outstanding invoices, payments received, and balances due. It serves as a tool for both the vendor and the organization to monitor financial obligations, reconcile accounts, and maintain transparency in transactions.

How Vendor Statement Works

Vendor Statements are used in Vendor Statement Reconciliation to ensure that recorded payments match vendor records. Organizations often integrate these statements with ERP Integration (Vendor Management) systems to streamline processing and improve accuracy. Effective management requires Segregation of Duties (Vendor Management) and adherence to Vendor Governance (Shared Services View) policies to reduce errors and fraud.

Vendor Statements also support broader financial reporting, linking with the Cash Flow Statement (ASC 230 / IAS 7), Statement of Financial Position, and Statement of Changes in Equity. Regular review of statements can inform Vendor Financial Health Assessment and guide initiatives like Vendor Performance Improvement Plan to strengthen supplier relationships.

Operational and Financial Considerations

Timely review of Vendor Statements helps organizations maintain accurate accounts payable records, prepare for audits, and support Vendor External Audit Readiness. It also enhances Shared Services Vendor Management by providing visibility into payment trends, overdue balances, and cash flow impact. Coupled with Customer Financial Statement Analysis, it provides a comprehensive view of financial performance and obligations.

Summary

A Vendor Statement is a document summarizing vendor invoices, payments, and balances. By leveraging reconciliation processes, ERP integration, and governance controls, organizations can improve accuracy, support audits, optimize cash flow, and enhance vendor relationships.