Balance confirmation: circularising a customer or supplier

A balance confirmation, or circularisation, asks a customer or supplier to confirm in writing the balance of their account in your books at a given date. It is external evidence: it shows that the receivable or payable exists and that its amount is right. Auditors request it at year end; finance teams use it to make their balance sheet reliable.

SynkriaOps produces the request from the contact’s profile, with the exact balance in your books, the items still open and a reply slip.

Produce the request

1. Open the contact’s profile (Sales → Customers or Purchases → Suppliers, then click the contact).
2. Click Print, then choose the Balance confirmation template.
3. Choose the As at date. By default, it is the end of the previous month; a future date is refused.
4. Review the proposed Subject and adjust it if needed.
5. Choose the Format and the Document language.
6. Click Download.

The proposed text reads:

As part of the review of our accounts, please confirm the balance of your account in our books as at [date] by returning the slip below, dated and signed. If you disagree, please state the balance shown in your books and the detail of the differences.

What the document contains

Block	Content
Header	Your company, the contact, their account number, the cut-off date and the notice “Reply to”.
Subject	The request text, editable.
Balance in our books	The amount at the cut-off date and its direction: “You owe us (debit)” or “We owe you (credit)”.
Open items	The invoices and credit notes not settled at the cut-off date, which make up the balance.
Ageing of the balance	The aged balance at the cut-off date.
Reply slip	”We confirm this balance” or “We do not confirm this balance. Our balance is…”, with space for differences (documents, dates, amounts).
Signatures	For your company (signature and stamp), and for the contact (“Authorised to commit the company”), with place and date.

The request says “Please reply within 15 days”.

Open items speed up the reply

The contact compares your list of open invoices with theirs. They immediately see the invoice they never received or the payment you have not recorded yet, instead of sending back a plain “no”.

The firm version

Signed in through the firm space, the accountant produces the request in the name of the firm, on behalf of the company: “Prepared by [firm] on behalf of [company]”. The subject becomes “As part of the review of the accounts of [company]…” and the signature block carries the firm’s stamp. The reply can come straight back to the firm.

Which contacts to circularise

Circularising every contact is rarely useful. A reasoned selection covers what matters:

• the largest balances, which weigh on the balance sheet;
• old balances, over 90 days in the aged balance;
• balances in the wrong direction: a customer in credit, a supplier in debit;
• contacts with a zero balance but heavy activity, where a debt may be forgotten;
• contacts in dispute or whose payment delay is lengthening (see the contact profile).

The subsidiary and aged balances give you this list in minutes.

Handle the replies

Reply	What to do
Balance confirmed	File the signed slip with the year-end file: it is the evidence.
Explained difference (payment in transit, invoice not received by the contact, unposted credit note)	Match the documents. If the difference is on your side, record the missing document; otherwise, note the explanation.
Unexplained difference	Ask the contact for their account detail and compare it with the subsidiary ledger.
No reply	Remind once, then justify the balance another way: payments received after year end, delivery notes, contracts.

Do not correct a balance without a document

A difference reported by a contact is not erased by an adjusting entry “to make it match”. Every correction relies on a document: invoice, credit note, proof of payment.

Further reading

Printing a contact's documents Statement of account, payment schedule, subsidiary ledger, account analysis.

Matching third-party accounts Know what is really still owed before sending a request.

Closing a fiscal year Year-end checks, including justifying third-party accounts.

Viewing the trial balance General, subsidiary and aged balances to choose contacts to circularise.