Accounts payable reporting is an important part of business operation - with the potential to deliver clear insights into how to make better use of working capital. Learn how to improve your approach to accounts payable reports here.
Accounts payable (AP) is an accounting term used to describe money owed to suppliers, but it’s also the name of the department within a business that pays invoices, engages with suppliers, and reimburses employees for expenses. As such, accounts payable is a critical function to the efficient operation of any business.
And, just like any other department in business, accounts payable functions best when there is easy access to up-to-date and accurate data. This ensures, among other things, that payments to suppliers and creditors are made correctly and comply with tax and auditing requirements. Full and accurate data over payables will also provide more insights into how accounts payable can be optimized. Reviewing the way that you report on AP can help you achieve these goals, meeting your pre-set accounts payable KPIs.
Why accounts payable reports are important
There are a number of reasons for focusing on accounts payable reporting. For one thing, keeping accurate financial records is essential when it comes to understanding the working capital available to the company and taking steps to optimize cash flow. Accurate data over upcoming transactions also plays an important role in ensuring you pay invoices correctly and on time, which helps to maintain strong supplier relationships and avoid risking damage to your credit rating.
Another consideration to factor into the case for better accounts payable reports is that improving the way data is archived also ensures you have more information to refer back to during tax season.
Accounts payable reports
There are several different types of accounts payable report, each of which has a different purpose – from keeping on top of upcoming transactions to managing accounting activity. Key accounts payable reports include:
Invoice aging report
Not to be confused with the accounts receivable aging report, a accounts payable invoice aging report provides a list of all the unpaid invoices on the accounts payable books, typically grouped by due date or by whether they are currently on hold. The payables invoice aging report is used to track upcoming payments, identify any vendor invoices that may be overdue, and prioritize the actions that need to be taken by accounts payable.
Voucher activity report
The voucher activity report is another important part of AP reporting, used to track any outstanding payment vouchers over a specific period and able to be filtered for different criteria. It is often used by accounts payable to view spending within a certain department or group, or by a particular project.
History of payments report
The history of payments report provides a list of all business expenses and transaction dates over a certain time frame. As such, it represents the company’s total spend, and can be assessed against the annual projected budget. The history of payments report is used to maintain visibility over total expenditure and transactions, improve control over spending, and avoid exceeding the budget.
Reconciliation of accounts
Another common accounts payable report is the reconciliation of accounts report, which shows the accounting activity related to payment vouchers that have been issued in a particular time frame. It can be compared with the general ledger to ensure that payments are being scheduled and made to the right parties. Any discrepancies between the two reports can indicate human error or incorrect payments.
How to improve your approach to accounts payable reporting
Accounts payable reports are designed to provide better insights into the company’s accounts. As such, optimizing these reports is an opportunity to gain an accurate, clear, and timely view over accounts payable activity, and ultimately glean insights that can help to optimize your cash flow.
There are a number of ways that you can improve the accounts payable reporting process, including:
Ensure permanency of accounts payable data
AP reporting requires payables data that is not only readily available, but also protected from being lost or forgotten. Solutions that support centralized and paperless storage of invoices and payment vouchers, such as Taulia’s invoice automation solution, can streamline the reporting process and reduce the likelihood of any mistakes.
Establish a reporting schedule
Reports should be scheduled on a regular basis to ensure they are not forgotten – or better still, fully automated so that you don’t have to remember them at all. A robust reporting schedule will provide the insights you need in a timely fashion, helping to ensure that you pay invoices on time.
Keep vendor information easily available
The insights delivered through accounts payable reporting may prompt communications with vendors. As such, it is useful to have a central supplier information management system that supports easy and effective communication by maintaining full records. For example, Taulia’s supplier management solution enables suppliers to access their own master data and request changes, meaning that your supplier data is always accurate and up to date.