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We saved more than $1 million on our spend in the first year and just recently identified an opportunity to save about $10,000 every month on recurring expenses with PLANERGY.

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Cristian Maradiaga

King Ocean

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Accounts Payable Reporting

Accounts Payable Reporting

Accounts Payable Reporting

Accounts payable reporting is what makes it possible for small business owners to track credit expenditures and verify the bills have been paid. Keeping accurate AP records and creating an efficient process to produce and review them is crucial to creating timely and precise reports that guarantee suppliers are paid on time and the business credit rating doesn’t decline.

Accounts payable represent cash expenses because accounting considers short payment terms in business credit the same as using cash to make the payment. It doesn’t matter if payment is made with check, bank transfer, or credit card – it’s all the same to accounts payable. AP includes anything a business uses or buys throughout the course of conducting business, including inventory, production materials, office supplies, utilities, travel and entertainment expenses, and so on. AP reports generally cover one month or less, despite the fact that the time frame for reporting may vary depending on business owner needs and payment schedules. AP reports are also used to verify bill payments and assist with cash flow management.

Invoice Aging Report

The invoice aging report gives a list of all the unpaid AP invoices on the books, including the ones that are due for payment, those not due yet, and those that are being held as a result of errors or questions about the invoice charges. Aging reports group invoices by the due date and hold status. Using this report, a business owner can find missed payments or determine when a payment is due, the number of days a payment is past due, and when it’s time to come into resolve the issues causing invoices to be put on hold.

AP Trial Balance

Running the AP trial balance report at the end of every month can assist with catching vendor payment and mathematical errors. This process is similar to balancing a checkbook in that all payments made should have a matching entry in the general ledger. When there are payments that don’t have a matching entry or have an entry that doesn’t match correctly, it indicates that vendors may have been paid too much or too little, a payment was issued to the wrong vendor, or no payment was issued.

Often times, issues with mismatches can be related to Goods Received Not Invoiced (GRNI), which happens when the business receives inventory but has yet to receive the invoice for it. Because the invoice hasn’t been received, the liability to pay for the goods cannot be added to AP and is temporarily added to the GRNI account. Once the invoice is received from the vendor, the liability for payment is transferred from the GRNI account to the AP account of the supplier. When this occurs, the balance on the GRNI account is zero, the receipt of goods into inventory is recorded there, and the payment liability is recorded in AP.

Voucher Activity Report

AP payment vouchers are an important part of the accounts payable process flow. They serve as a kind of middleman between the time an invoice comes in from a supplier and the time the invoice is paid. Each voucher contains the payee name, amount due, payment terms, due date, and a signature authorizing payment.

The voucher activity report can be pulled up any time during the month and run based on specific criteria, such as a date range, vendor, department, or all suppliers. Running this report gives organizations a quick way to check total expenditures, see what’s already been paid, and what remains to be paid for the rest of the month.

Reconciliation of Accounts

The open reconciliation report shows all accounting activity related to issued payment vouchers for a given period of time. It refers to company debts as liability accounts. With this report, the business owner can verify any outstanding liabilities against the financial information in the GL to confirm that the company is making payments to the right vendors and the business isn’t carrying any delinquent liability accounts. If there are discrepancies between the GL and open reconciliation report, it’s an indication of a mathematical error or missed payments to vendors.

Though similar to the invoice aging report, the difference with the reconciliation of accounts is that it shows the balance against the GL information. The invoice aging report does not have to balance to the ledger due to edited or split obligations.

History of Payments

The history of payments report provides a list of all business expenses within the designated reporting time frame. It represents the total expenditures of the business on its liabilities and allows the business to track total spending for the given time period. Keeping an eye on this report is essential to adhering to the annual operating budget and attempting to control spending. Small business owners who fail to monitor total expenses can easily go beyond the operational budget, which may prevent the company from being able to continue meeting financial obligations in the future.

Within accounts payable, there are many report options to choose from. All of them have a purpose, though some are more useful to business owners than others. All companies should strive to have an efficient AP process that has quality internal controls to prevent paying fraudulent invoices, prevent paying inaccurate invoices, prevent duplicate payments, and ensure that no vendor invoices fall through the cracks. This means striving for accurate and timely entry and payment, to ensure the reporting data is accurate as well. Omitting records means liabilities will be omitted from the balance sheet and income statements, but duplicating them means liabilities are overstated, as well as expenses.

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