The Three Most Important Accounts Payable Reports

Accounts payable reporting makes it possible for a business owner to track credit expenditures and verify bill payments. Accurate AP records and an efficient process for producing and reviewing them create a base for timely, correct reports that ensure suppliers are paid on time and the business's credit rating doesn't slip. Of the three most important AP reports, the first is a daily report a business owner can use for cash flow management, while the remaining two are useful at the end of each month.

Accounts payable represent cash expenditures. This is because accounting practices consider the short payment terms inherent in business credit the same as using cash. Accounts payable includes anything a business buys or uses in the course of doing business, including production materials, inventory, travel and entertainment expenses, office supplies and utilities. This is why AP reports usually cover a period of one month or less even though the time frame for AP reporting can vary depending on payment schedules and the needs of a business owner.

AP payment vouchers are a common and often integral part of the accounts payable process flow. They function as a sort of middleman between the time a vendor or service provider invoice comes in and the time the invoice is paid. Each includes the payee name, terms, amount due, payment due date and a payment authorization signature. At any time during the month, a business owner can run a voucher activity report using specific criteria – department, date range, specific vendor or all vendors and suppliers – as a quick check to assess total expenditures, see what has already been paid and what remains open for payment for the month.

An invoice aging report provides a complete list of every unpaid AP invoice on the books. This includes invoices due for payment, those not due and those on hold due to invoicing errors or questions about invoice charges. Aging reports group invoices by the date they're due and whether they are on hold. This allows a business owner to identify missed payments or know when a payment will be due, how many days a payment is past due or when it's time to step in to resolve issues that require an invoice to be put on hold.

Running an AP trial balance at the end of every month can help catch mathematical or vendor payment errors. The process works much the same as balancing a checkbook in that each payment made should have a matching general ledger entry. Those that match incorrectly or do not have a match are a red flag that a vendor may have been overpaid or underpaid, a payment was issued to the wrong vendor or no payment was issued.