Accounts payable reports are one of many business intelligence tools that are rapidly changing as digital AP transformation fully affects accounting and bookkeeping.
Accounts payable reporting describes the entire range of transaction logging through and with your existing AP infrastructure – a necessary task but daunting if your firm is scaled enough to manage hundreds or more transactions during each cycle. However, emergent finance automation tools, including AP automation, help deliver value from accounts payable reports to maximize your cash flow management and capital structuring opportunities.
What are Accounts Payable Reports?
Accounts payable (AP) reports are single or aggregated reports or outputs from your AP platform that detail received invoicing, cash outflow, bills, and debt payments. Bottom line – if it’s a transaction that your AP department touches, there’s a corresponding accounts payable report tied to it.
From a bigger picture accounts payable analysis reporting is much more than a simple transaction log. Like any financial reporting tool, what you get out of it is what you put into it. And, if you’re diligent about ensuring transactions are logged properly, your accounts payable analysis reporting tools can help deliver untold value through data analytics while ensuring you never miss a payment or let an invoice go past due.
Within the ecosystem of analytics that accounts payable reports facilitate, you’ll be able to:
- Identify and, with artificial intelligence and automated AP tools, forecast and predict invoice and payment fraud.
- See which departments are spending the most and on what – reducing slippage and budget bloat.
- Forecast future cash requirements on the back of analyzing recurring payments and better allocate your capital management structure.
Why Do You Need AP Reports?
While analytics delivered from A/P reports are wonderful business tools, their utility varies depending on your industry and business size. The final bullet point in the last paragraph is the real moneymaker when you’ve evaluating accounts payable reports – literally.
Your business lives and dies on its cash management strategy. Too much cash on hand and you’re wasting opportunity; too little, and you risk insolvency, missed vendor payments, or too little inventory. In any case, optimal cash flow management comes from effective accounts payable reporting.
Likewise, effective accounts payable reports help generate the other important type of business capital – human relationships. Your supplier and vendor connections can make or break a business, and proactively predicting cash flow helps ensure timely and accurate payments to vendors.
The Most Common Accounts Payable Reports
The best A/P report is the one you use most. Trying to define the top report isn’t practical because every business leverages its reporting infrastructure and workflows differently. Still, a handful of common AP reports tend to drive the most business action.
These include:
Accounts Payable Aging Report
This report will sort invoices and bills by due date to pin down which are overdue, which are in danger of becoming past due, and which have sufficient time remaining to plan ahead. AP aging reports help prioritize cash flow to the most urgent bills and serve as a recurring “health and status check” when run on a determined schedule, i.e., weekly.
Payment History Report
Depending on how your standard operating procedures (SOP) manage transaction tagging, you can sort payment history by type or vendor to identify where the bulk of your cash is going and why. This also helps prevent budget bloat when sorted and filtered by individual or departmental purchasing history.
Vendor Reporting
Instead of sorting payment history by type or origin, you can also see which vendors receive most of your money. This helps prioritize vendor relations, as in preplanned payment schedules, as well as providing leverage during future negotiations to secure discounts and volume deals. If you’re running short on cash, sorting debt by vendor also helps ensure the largest balances get paid down quickly.
Vouchers Reporting
Since vouchers serve as payment authorization mechanisms, voucher reports help further identify individual and departmental expenditures and can be analyzed within the context of budget authorization management and fraud detection.
Account Reconciliation Report
Account reconciliation reporting is used in 2- and 3-way matching to generate a log of AP transactions that are, in turn, matched to their corresponding documentation to ensure the right amounts are being paid to the right people. Account reconciliation is effectively an internal audit tool to prevent fraud and ensure your established systems work as intended.
Trial Balance Reporting
Part of your accounting cycle, the accounts payable trial balance report helps ensure each of your financial statements ledger entries are accurate and appropriately matched.
Credit and Discount Reporting
Both credits and discounts save your company money, so monitoring each through AP reporting is paramount to effective cash flow management. Credits are predefined offsets to future bills, like a store credit from a retailer, but applied to your vendor’s products.
Like retail store credit, your vendor might issue credit for any number of reasons, including late or damaged goods. Maintaining awareness of which credits are on hand helps your business not lose an opportunity.
Suppliers often offer discounts for specific actions, like early payment, so logging and keeping track of each possible discount helps maximize your financial functioning.
Recurring Payment Reports
Recurring payments like leases, mortgage payments, utility bills, and similarly structured bills are easily forecast when you use accounts payable reporting. By analyzing past recurring payments, you can project future cash flow needs, maximizing the use of available capital today while avoiding missed payments.
Turnover Metrics Reports
Most accounts payable platforms offer analytics that include turnover reporting, which displays how quickly you pay vendors. AP turnover is just one of many business intelligence metrics that help drive strategic, long-term decision-making.
How Can I Improve My Accounts Payable Process?
Accounts payable reports aren’t an outcome in and of themselves. Instead, their true value lies in how you use your AP reports to drive efficiency and adaptation. Using some of the above reports and adding your own customization and tailored approach, you can use accounts payable reporting to:
- Establish recurring touchpoints and reminders to ensure bills don’t go unpaid or past due.
- Keep an accurate log of current vendor points-of-contact (POCs). Managing a virtual Rolodex of vendor POCs through your report structure helps ensure speedy communication and cut down latency.
- Maintain a documentation log to feed future decision-making, assist in external or internal audits, and manage fraud.
- Determine which bills should be paid early, and why (like a discount), and which can be punted to the last minute. These choice diagrams help manage short-term capital allocation to maximize opportunity.
- Speed up your automation and workflows by identifying lagging areas, inefficiencies, and redundant approvals. If you have yet to establish AP automation, then you understand how cumbersome manual AP reporting is – and why so many companies are pivoting to automated solutions.
