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Reconcile supplier opening balances, credit purchases, payments and adjustments to ending accounts payable. A worked supplier table shows the movement calculation and the checks against the closing ledger.
The ending accounts payable formula starts with opening payables, adds purchases on credit and subtracts payments and other reductions. Documented adjustments complete the bridge to the closing balance. Use supplier postings for one accounting period, then prove that the calculated balance matches the books.
Ending accounts payable = Opening accounts payable + Credit purchases − Supplier payments − Supplier credits − Settlement discounts + Signed other adjustments
Accounts payable represents obligations to suppliers arising from credit purchases of goods or services, as explained in OpenStax's discussion of current liabilities. An invoice increases the obligation; settling that invoice reduces it.
In this formula, purchases, payments, credits and discounts are positive amounts in separate columns. Other adjustments are signed: positive increases AP and negative reduces it. If your export already stores signed movements, add those movements directly instead of subtracting negative payments again.
The calculation answers a balance question. Days payable outstanding answers a timing question. A reconciled closing balance is useful input to that analysis, but the balance formula does not establish how quickly suppliers were paid.
Bring the opening supplier trial balance, the period's AP transaction register, the closing supplier trial balance and the AP control-account ledger. Use the same entity, account scope, posting dates and reporting currency across all four. Retain supplier ID, document ID, posting date, transaction type and amount so each subtotal can be traced back to a document.
Map the transaction types before summing them:
| Formula component | Export rows to include | Check before adding |
|---|---|---|
| Opening AP | Unsettled supplier balances at the previous close | Matches the approved opening ledger |
| Credit purchases | Posted invoices that credit the AP account | Includes goods and services within the account scope |
| Payments | Cash settlements applied against AP | Uses the AP posting, rather than a second bank-export copy |
| Supplier credits | Posted returns, allowances and invoice corrections | Has not already been netted against the invoice column |
| Discounts | Settlement discounts that reduce the obligation | Payment column contains the cash paid only |
| Other adjustments | Supported reclassifications and other AP postings | Keeps the original sign and journal reference |
Exclude a cash purchase that never entered AP. If an immediately paid purchase did pass through AP, retain both its invoice and settlement; omitting only one side creates a difference.
Do not replace credit purchases with cost of goods sold. Purchases and expenses occur on different bases when inventory is involved. The IRS's cost-of-goods-sold explanation separately identifies purchases, other inventory costs and ending inventory when deriving the cost of goods sold. That distinction matters even though this worksheet reconciles book payables rather than calculating a tax deduction.
A US distributor reconciles September 30, 2026, opening balances to October 31, 2026, closing balances. Its October register has the following movements. Every amount is USD, with no currency translation in this example.
| Supplier | Opening AP (USD) | Credit invoices (USD) | Cash paid (USD) | Credits (USD) | Discounts (USD) | Other signed adjustments (USD) | Calculated closing AP (USD) |
|---|---|---|---|---|---|---|---|
| Summit Packaging | 80,000 | 120,000 | 100,000 | 5,000 | 1,000 | 2,000 | 96,000 |
| Prairie Components | 60,000 | 90,000 | 85,000 | 2,000 | 500 | -1,000 | 61,500 |
| Atlantic Services | 40,000 | 40,000 | 40,000 | 1,000 | 500 | 2,000 | 40,500 |
| Total | 180,000 | 250,000 | 225,000 | 8,000 | 2,000 | 3,000 | 198,000 |
The other-adjustment column contains documented journal transfers into or out of supplier balances. It is not a place to put unexplained differences.
Place these columns in A:H, with suppliers on rows 2:4. Calculate H2 and fill down:
=B2+C2-D2-E2-F2+G2
Summit is $80,000 + $120,000 − $100,000 − $5,000 − $1,000 + $2,000 = $96,000. The company bridge shows each total step:
| Step | Movement (USD) | Running AP balance (USD) |
|---|---|---|
| Opening balance | 180,000 | 180,000 |
| Add credit invoices | 250,000 | 430,000 |
| Subtract cash payments | -225,000 | 205,000 |
| Subtract supplier credits | -8,000 | 197,000 |
| Subtract discounts | -2,000 | 195,000 |
| Add net other adjustments | 3,000 | 198,000 |
All amounts are whole dollars; no rounding is needed. This is a supplier-specific application of rollforward accounting.
First, sum the three calculated supplier balances: $96,000 + $61,500 + $40,500 = $198,000. Then compare that result with the closing supplier trial balance and the AP control account.
| Closing check | Balance (USD) |
|---|---|
| Calculated supplier total | 198,000 |
| Closing supplier trial balance | 198,000 |
| Closing AP control account | 198,000 |
| Calculated less control account | 0 |
Check each supplier too. A zero company difference can conceal an error allocated to one supplier and an equal opposite error allocated to another. Retain the report date and source references with the reconciliation so a reviewer can reproduce it.
If Atlantic's $1,000 credit were missing from the movement register, the calculation would give $199,000, leaving a $1,000 difference against the unchanged ledger. Locate the credit and determine which export omitted it. Do not assume that every difference is a missing payment.
After the balance ties, use accounts payable dashboard examples to organize the payment and supplier measures that follow from the reconciled file.
Bring a sample of your own supplier balances, AP movements and closing ledger in a file or Google Sheet. Covirage maps the columns; its tools compute and check the movement bridge, and the external AI model explains the result with every figure traced to its rows. Create a free Covirage account and bring your own export.
See financial planning and reporting for the supporting finance workflow.
No. Cost of goods sold measures the cost of items sold during the period. Credit purchases create supplier obligations, including purchases still held in inventory and services outside cost of goods sold. Use the posted AP invoice register to identify additions.
A purchase paid immediately without an AP posting does not enter this reconciliation. Some systems post an invoice and its payment through AP even when settlement is immediate. Include both movements when they appear in the account being reconciled.
A journal may have posted directly to the control account, or the reports may use different posting cutoffs, entities or currencies. Compare the control-account activity with subledger postings and identify the specific unmatched entries before proposing any correction.
Not necessarily. More credit purchases near the period end can increase AP even when payment behavior is unchanged. Reconcile the balance first, then examine due dates, payment terms and payable days to understand whether payment timing changed.