How to track your company's accounts payable

bills to pay
Excel Spreadsheets

What is accounts payable control

An accounts payable control serves to jot down and project all of a company's expenses, from future payments, installment accounts, and amounts that, although they are not scheduled, you know they will. That way, you can see your outflow and track where your future spending is headed.

Accounts Payable Worksheet

While controlling any company's accounts payable is a relatively simple activity, not every company does or cares about this task. So if you know how to do the tracking of payments for your business you can have the following benefits:

  • Analysis of amounts payable
  • Comparison with accounts receivable (to understand cash requirements for future months)
  • Better payment scheduling
  • Help with controlling cash flow

Now if you are wondering the step by step how to make a good control of the accounts payable is just continue reading the post:

How to track your business's payables

Of course this process will not be the same in all businesses, as the payment methods and conditions vary from company to company, including variations depending on the type of system or accounts payable worksheet used, but in general, I believe there are 4 steps to a good control of payments:

  • Step 1 - Record the types of payment accounts for your business

This is the beginning of all financial control, here you will record the main types of payment accounts that your business has. Again, we will have variations from business to business, but in general you will not escape from the following division:

  • Direct expenses (linked to production or provision of services)
  • Fixed expenses (linked to the operation of the company in general)

Let's see each one of them starting with the direct expenses. Here you will have expenses like raw material, labor, specific commissions related to sales:

control of accounts payable

Already in the case of fixed expenses, are those that you will have regardless of whether you produce more or sell more services. They range from expenses with human resources (salaries, pro-labor, training, etc.), operating expenses (rent, accountant, legal services, water, electricity, etc.) to marketing expenses (advertising in magazines, newspapers, online like adwords and facebook ads, etc).

control of accounts payable

  • Step 2 - Record the accounts payable on purchases not paid or with future payment

After the initial step of registering your accounts, you can begin to make accounts payable by launching expenses that you already know you will have in future months. In general, this is the result you will see:

bills to pay

See that there are a number of fields that need to be registered to make good accounts payable control, such as:

  • Payment Prediction Date
  • Payday
  • Chart of accounts related to receipt
  • Original value
  • Final value (with interest, fine, etc.)
  • Payment status

In our example, since this is a month that has not yet occurred, all payment statuses automatically update with the number of days to expire.

  • Step 3 - Track receipts from month to month

Now that all your future payments are registered, it is time to track your payments. I recommend that this process be done on pre-scheduled days so that you do not have any operational work every day. Usually this is possible by combining with the vendor the payment date.

Basically you will now complete the payday (held) and additional interest (if any). That way you can do your accounts payable control and see if everything is being done as it should. See the example of filling out our accounts payable worksheet:

bills to pay

Please note that all payments have been made, that is, we owe nothing to anyone (at least that month) and that 8, 2 were paid late, resulting in a total fine of R $ 220.

  • Step 4 - Analyze your accounts receivable control

Now, to close your accounts payable control, just do the reviews on all your payments planned and performed. In our accounts payable worksheet we have already generated a number of important information:

  • Number of bills paid on time
  • Total paid accounts
  • Pending accounts
  • Number of overdue accounts
  • Total amount of overdue accounts
  • Percentage of overdue accounts in relation to total
  • Total amount of interest due for delay

Here's how they are presented in the overall report:

bills to pay

In addition to the overall consolidated results, you can also see the total of accounts payable and the total that was actually paid up to the time of analysis.

bills to pay

Best practices for good accounts payable control

To help with payment tracking, use a Accounts Payable tool to record all costs and expenses that have already been or will leave the company.

Accounts Payable Worksheet

Check out the best practices in controlling accounts payable:

  • Whenever possible, it splits the payments so as not to have a very large weight in a given month
  • In case of delays, negotiate non-payment of fines
  • Store invoices, receipts, and tickets in a physical folder
  • Have the virtual copy stored in the cloud
  • Record payments to be made in a calendar
  • Try not to miss deadlines

See how important it is to take care of your bills? If you want a help to make this control in your company, I recommend Accounts Payable worksheet.

Excel Spreadsheets



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