Cash flow is king for every business, which is why many organizations try to stretch supplier payments. It helps keep money in your business and channel it to other, more pressing business needs. 

Unfortunately, you can only stretch these payments as far as the agreed terms before receiving calls from angry vendors. Even worse, late payments could lead to penalties and ruin your business’s credit score.

That’s why keeping tabs on all your supplier invoices is essential for ensuring they don’t fall past due. An accounts payable ledger helps you keep your accounts payable transactions in order so nothing falls through the cracks. 

In this article, we’ll discuss what an accounts payable template is, the line items it should have, and alternatives to using a manual template.

What Your Accounts Payable Template Should Include

The accounts payable ledger is an aging report that allows you to track the payments and due dates for all your supplier’s invoices. It also tells you the total outstanding amounts your company owes to its vendors at any moment. 

Whether you are creating an aging template from scratch or using our free download, there are essential items your accounts payable (AP) aging ledger must have, including the following:

• Name of the supplier: Listing the vendor’s name makes it easy to identify and differentiate between each line item, especially if you have suppliers with similar names.

• Date of the invoice: This section indicates the date the supplier billed you for goods or services delivered or offered. The invoice date will help you estimate the payment due date based on the agreed credit terms with the vendor. 

• Invoice number: Every invoice has a unique identifier, the invoice number. It will help track payments, reconciliations, and relevant information about each invoice. 

• Invoice amount: This section reports the total amount owed to the supplier. It’s the amount at the bottom line of the vendor’s invoice. 

• Credit terms: These payment periods indicate the number of days a vendor’s invoice can remain unpaid. It will help you calculate the due date for the invoice.  

• Due dates: This section shows the deadline for paying the supplier. Some suppliers have a due date indicated on the invoice. However, some suppliers don’t provide this, leaving you to calculate the due date based on the payment terms.

• Date of payment: This column records the date you pay the vendor. It helps to have several payment columns to help record different dates of payments.  

• Balance due column: Here, you’ll see how much you have left to pay the vendor. If you made a deposit or are paying in installments, this column deducts the payments from the total invoice amount. Our accounts payable Excel template below is dynamic with formulas that auto-calculate this amount for you.

• Total accounts payable: This column sums up the amount you owe all your suppliers. If you use a dynamic spreadsheet, the total amounts will auto-sum based on the balances for each supplier. 

• Days overdue: Finally, this column will help track the days a supplier’s invoice is past due. Knowing how many days an invoice is past due allows you to calculate extra costs if the supplier charges a late fee or penalty. 

Free Accounts Payable Template

Our free accounts payable template lets you stay on top of all your supplier payments. 

The template is easy to use with dynamic formulas that auto-calculate supplier balances and the total accounts payable:

• Download in Excel
• Download in Google Sheets

BONUS: Simplify Your Accounting Workflows with This Free Resource

If you’re looking for simple workflow templates to stay on top of your projects and tasks for clients, access our collection of 32 customizable accounting workflow templates and checklists here. This free resource includes a ton of the most popular accounting templates including monthly bookkeeping, weekly accounting analysis, client onboarding procedures, and common tax return forms.

Alternatives to Manually Keeping Track of Accounts Payable

While manual templates will help manage a business’s financial records, things can quickly get out of hand as your business expands. At this point, you will need an accounts payable (AP) managing tool for collaboration and digitizing the process.

Accounting software providers have enabled businesses to automate manual bookkeeping and accounting processes, including AP processes. Additionally, you can auto-generate financial reports at any particular moment, saving you the time and hassle of manually creating them.

Some of the best accounts payable software solutions include the following. 

FreshBooks

FreshBooks is an accounting software for freelancers, self-employed professionals, and small businesses with employees or contractors. It primarily serves construction, legal, IT, accounting, and marketing companies.

Pros

• Affordable plans for small businesses 
• Has iOS and Android apps
• Easy to learn and use 

Cons

• Not ideal for a large business 
• Few customization options 
• Additional cost to add more users 

Pricing 

FreshBooks has four pricing plans with a 30-day free trial:

• Lite: $6.80/month 
• Plus: $12.00/month
• Premium: $22.00/month
• Select: custom pricing 

QuickBooks

QuickBooks is a widely used accounting software with accounting and finance features for businesses in numerous industries. It includes a bill management feature that makes your accounts payable process seamless, including scheduled and automated bill payments, partial payments, and keeping track of payments using its app.

Pros

• Quick learning curve for beginners
• Several plans to choose from
• App to keep track of expenses on the go
• Robust features
• Allows integration with third-party apps and software

Cons

• Potentially pricey for a small business
• Limited users
• Limited customer support

Pricing

• Simple Start: $15.00/month
• Essentials: $27.50/month
• Plus: $42.50/month
• Advanced: $100.00/month

NetSuite

NetSuite by Oracle is an enterprise resource planning (ERP) accounting software with robust accounting and finance features for medium and large businesses. Its accounting product includes account receivable, accounts payable, asset management, cash management, tax management, payment management, and a general ledger. 

In addition, NetSuite’s AP feature has automated the AP process, from the review to the approval and payment of supplier invoices.

Pros

• Versatile features
• Easily customizable to suit your business needs
• Integrates with third-party software

Cons

• No free trials
• A steep learning curve
• Must schedule a consult for a pricing estimate

Pricing

NetSuite prices will depend on your business needs, including the core platform used, optional modules you choose to have, and the number of users.  

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In an ideal world, selling a product or service would be as easy as delivering the requested item and pocketing the cash immediately. While we can dream of having such a seamless sales process, the reality requires a bit more work. 

In most cases, you’ll find yourself delivering the product or service first, along with an invoice, and receiving payment later. Depending on your credit terms and the customer’s ability to pay, that invoice could be outstanding for a short or extended period.

This process is why an accounts receivable (AR) ledger is your best friend. You may have made a sale, but the transaction isn’t complete until the money is in your bank account. That income keeps your business running, covering your operating expenses and investments. When customers fail to pay on time, you risk having a cash flow problem.

An AR ledger allows you to manage outstanding payments by tracking an invoice’s due date. This article will guide you through all things AR—from its definition to what to include in your ledger as well as software alternatives to manual AR accounting templates. You’ll also find a free AR ledger template you can download to get you started.

What Your Accounts Receivable Template Should Include

Your accounts receivable ledger template summarizes outstanding customer payments. To be comprehensive, it should include the following components:

• Customer name: You need to identify the customer being invoiced. If you have different customers with similar names, look for unique ways to separate them for easier identification. 

• Invoice date: Display the date and/or time you’ve billed a customer and officially record the transaction, which helps keep track of the payment deadlines based on the customer’s payment terms. When sending multiple invoices to the same client, indicate the specific date you billed each item.

• Invoice number: Every invoice needs a unique number to act as its identifier. The invoice number helps track and separate each invoice and makes auditing and filing taxes easier. It can be a number, letters, or a mix of both. Use invoicing software and a sequential series to number your invoices and make the process more manageable. 

• Receivable amount due: This is the net amount each customer owes. It should not include partial payments the customer might have made. 

• Credit terms: How many days are you giving your customers to make the payment after invoicing them? Your options include a net of 15, 30, or 60 days. 

• Due date: This is the date the customer needs to make payment. Including due dates in your AR ledger template lets you spot delinquent payments quickly. 

• Payment date: This date indicates when you received payment from the customer for a specific invoice. Include multiple sections in your AR template for customers who make several payments on an invoice. It’s essential to capture each payment date separately for better tracking and financial reporting.

• Payment amount: This section indicates how much you have received for the invoice. If paid partially, break the payment columns down by each specific payment date.

• Outstanding balance: This displays the remaining payment amount, which is especially important when you have partial payments. 

• Total outstanding amount: This section reveals the total amount of your outstanding receivables. This summary gives you a quick glimpse of how much your business expects to receive from its customers. 

Free Accounts Receivable Template

You can create your own AR template spreadsheet or download one. If you create one, use the details above on essential items to include in your template as a guide. 

However, to help you get the AR ball rolling, here’s a free AR template with dynamic formulas to lessen the need for manual calculations. Downloading this free template will get a head start on tracking, managing, and reconciling your receivables more efficiently.

• Accounts Receivable Ledger Template (Excel)
• Accounts Receivable Ledger Template (Google Sheets)

BONUS: Simplify Your Accounting Workflows with This Free Resource

If you’re looking for simple workflow templates to stay on top of your projects and tasks for clients, access our collection of 32 customizable accounting workflow templates and checklists here. This free resource includes a ton of the most popular accounting templates including monthly bookkeeping, weekly accounting analysis, client onboarding procedures, and common tax return forms.

Alternatives to Manually Keeping Track of Accounts Receivables

As your business grows, so does the number of transactions and accounting processes you need to manage, including more manual AR work. It also leaves more room for discrepancies and fraud. Turning to alternative options like AR tracking software makes good business sense when you reach this point. Here are a few accounting software providers to consider. 

QuickBooks Online

QuickBooks is an accounting software for small, medium, and large businesses. Since it’s a comprehensive accounting software system, it’s got a dynamic AR feature. It allows you to customize and send quotations and convert them to invoices, invoice clients in multiple currencies, set recurring invoices, and send automatic reminders for outstanding invoices.

Pros

• A user-friendly system, even for a beginner
• Integration option with multiple apps, banks, and credit cards
• Generates financial reports
• Includes a mobile app 

Cons

• Additional features require buying pricey plans
• Costly for a small business in need of extra features
• Customer support can be slow

Pricing Plans

• Simple Start: $15/month, 30-day free trial for 1 user and an accountant
• Essentials: $27.50/month, 30-day free trial for 3 users and an accountant
• Plus: $42.50/month, 30-day free trial for 5 users and an accountant
• Advanced: $100/month, 30-day free trial for 5+ users and an accountant

Zoho Books

Zoho Books is accounting software to help you track your business finances, including customer accounts. You can create and send customized quotes and convert them into invoices. You can also send customers reminders for overdue payments and generate an AR aging account. 

Additionally, Zoho can assist you in managing other accounting processes, including bank reconciliations, accounts payable, generating financial reports, and integrating with third-party apps and software. 

Pros 

• Free plan
• More affordable plans for small businesses
• Includes a mobile app 

Cons 

• Costlier for higher plans 
• Limited integration capabilities 
• Only premium plans have inventory accounting

Pricing Plans

• Free: for businesses with annual revenues up to $50K, for 1 user and an accountant
• Standard: $20/month for 3 users and an accountant 
• Professional: $50/month for 5 users and an accountant
• Premium: $70/month for 10 users and an accountant
• Elite: $150/month for 10 users and an accountant
• Ultimate: $275/month for 15 users and an accountant

Wave 

Wave is a free cloud-based software ideal for small business owners and anyone looking for accounting software on a budget. Although free, it still offers powerful features for your accounting, AR, and banking needs. Its invoicing feature allows for invoice customization, recurring billing, setting payment reminders, and generating an AR aging report. 

Pros

• Free invoicing, accounting, and banking features
• User friendly 
• Includes an app 

Cons

• Lacks integration capabilities
• No inventory accounting 
• Customer support can be limited

Pricing Plans

• Free accounting, invoicing, and banking capabilities, with tiered payment plans for features like payroll, payment processing, and advisors. 

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While the year-end closing process is familiar to most due to tax reporting, it’s not the only necessary period-end process a business should have. 

The month-end closing process is just as essential, especially if you want to avoid the headache and overwhelm of last-minute error corrections spanning months during tax seasons.

Closing the month can be overwhelming due to the sheer number of tasks that must be handled. Discrepancies in your financial reports could lead to inaccurate data for future decisions, a mistake that could quickly spell disaster for any business. 

Fortunately, you can avoid missing details or making mistakes with proper planning and organization. A checklist is essential during the monthly closing process. This article will share why having this checklist is important, the key items to include, and a free template to get you started. 

11 Key Month-End Tasks to Include in Your Checklist

A period-end process refers to the end of every accounting period, monthly or annual, when a business generates financial reports to help analyze its financial health. For this to happen, it must organize and perform account reconciliations for the period. 

Once you execute this process, you lock or mark the period as completed, ensuring no other transactions can be performed. Because the period-end process has many moving parts, a checklist becomes a vital tool.

A month-end close checklist helps bookkeepers, accountants, and business owners take charge of their business accounting procedures and itemize tasks needing completion before closing the period. In addition, it helps ease the closing process, reducing the chances of mistakes, errors, and missed deadlines. 

The contents of a checklist vary between companies and industries. However, the following list outlines the general items your checklist should include.

1. Complete Reconciliations for All Bank Accounts and Credit Cards

A typical reconciliation process for bank accounts and credit cards includes looking for discrepancies between each account and its general ledger counterpart. The two must have the same closing balances. However, this frequently doesn’t happen due to a lack of reconciling items. 

The discrepancies could range from uncleared checks and processed payments yet to be debited from your bank account to incorrect or missed transaction entries into the accounting system. Whatever the cause of the difference, the next step is to process the necessary journal entries to make adjustments. 

This process helps capture errors in bank or credit card statements or ledger accounts. It also enables you to understand your business’s cash situation and usage and catch any fraudulent activities before they get out of hand.

2. Reconcile The Loan Balance to The Statement

Most businesses use credit to run their operations, especially when purchasing assets for investing in capital-intensive projects. These loans create a liability for the company appearing in its balance sheet. 

Since businesses pay more than they borrow, you must record the interest expense as it accrues or gets paid. You must also record the principal repayments promptly to ensure your business reports the proper balance it owes.

That’s where reconciling a loan ledger to the balance in the statement comes in. The process will allow you to stay on top of loans and interest repayments, ensuring you are reporting the correct liabilities of the business.

3. Secure Copies of Receipts for Capital Items

Capital items are an intensive cash outflow for the business. As such, reconciling the assets account allows you to confirm the balance and post the necessary transactions. 

One of those transactions is the depreciation expense, which helps you recover the cost of the item over its life. The second transaction is posting and recognizing newly acquired assets into the company’s accounts. 

This process ensures the impact of such a transaction reflects on financial statements, such as the balance sheet, cash flow statement, and income statement. 

4. Confirm the Suspense Holding Account

A suspense account temporarily holds transactions yet to be classified or discrepancies you need more information about. Because it is a temporary account, any transactions here should not sit in this account for extended periods. 

During your month-end closing procedure, take a moment to confirm the entries sitting in this account. It allows you to reconcile and post entries to their correct ledgers. 

5. Reconcile the Payroll Account

A payroll account helps the finance or Human Resources team keep track of employee details, such as their names, positions, pay rates, benefits, hours worked, and gross and net pay. Reconciling this account involves confirming its balance with the payroll register.

The goal is to ensure payments to all employees are correct, including bonuses, commissions, and other benefits. It also allows you to confirm that all payroll entries, including accruals, are posted to the accurate ledgers. Finally, it ensures the correct posting and payment of payroll taxes and other statutory deductions.

6. Reconcile the Operating Account

An operating ledger account constitutes the business’s operating expenses, such as marketing, research and development, office supplies, and insurance. Reconciling this account involves verifying the expense transactions for the period, creating the expense report, and posting it in the relevant period. 

Doing this ensures you capture the correct expense details, including the amounts and dates. Then the balances in the profit and loss statement will accurately reflect the cash outflows for those operating expenses.

7. Reconcile The Accounts Payable Balance

The accounts payable (AP) balance shows up on your company’s balance sheet for the period as a liability. That figure is simply a representation of any money your company owes to its suppliers and vendors. It’s essential to reconcile the AP ledger and ensure your figures are current and correct.

The process involves getting the AP ledger and comparing its balances with the AP aging report. The details in these accounts must match, including the vendor invoice details, like the invoice number and amount. 

Next, investigate any discrepancies and post relevant journal entries to correct the errors. You can also process payments for overdue supplier payments you might have missed during the month.

Reconciling AP helps you discover errors, such as incorrect transaction amounts posted into your system or missing documentation, and allows you to resolve them on time. It also lets you record pending invoices not posted into the accounting system. 

If you incurred an expense, but the supplier has yet to send their invoice for payment, you can accrue the transaction and still be current in your financial reporting. Plus, it ensures you maintain a good relationship with your suppliers. 

8. Reconcile the Accounts Receivable Balance

The accounts receivable (AR) ledger is the opposite of accounts payable. It shows the money your customers owe your company. In short, it reflects the cash for products or services you sold or delivered and have yet to receive payment from your customers. The period’s balance in the AR ledger appears in your balance sheet as an asset.

To reconcile AR, you can start by requesting customer statements and comparing the data and balances to your AR aging or specific customer account ledger balances. 

Next, investigate the cause for these variances, and reconcile them by posting those transactions in the relevant journals. Some common reasons for these variances include incorrect entries, short pays, and unapplied credit memos.

In addition to confirming the accuracy of the balance, reconciling the AR ledger ensures your financial reports are also accurate. It allows you to report correct tax deductions, curb fraud, and maintain a good relationship with your customers. 

9. Review Profit and Loss Statements for Proper Class Tracking

The profit and loss account summarizes the company’s income and expense transactions for the period. Its bottom line, the net income, indicates the company’s profits after all expenses, including loan interests and tax payments. 

Because of this, it’s crucial to get all the transactions right. Reviewing it allows you to confirm that all transactions were posted in the proper ledgers and that the bottom line correctly indicates your company’s profitability.

10. Review Profit and Loss Month-Over-Month and Investigate Large Variances and Changes

Besides reviewing the proper class tracking of transactions, reviewing the current and previous month’s profit and loss balances is imperative. This exercise helps you uncover significant changes in the profit and loss line items, which could indicate any significant underlying issues such as increased spending, lower earnings, and incorrect transaction entries.

11. Review the Balance Sheet Month-Over-Month and Investigate Large Variances and Changes

In addition to the previous step, you must conduct a month-over-month review of the balance sheet. This process allows you to confirm the balances in the balance sheet line items, which are the assets and liabilities plus the owner’s equity accounts.

Significant changes in the balance sheet line items indicate incorrect or missed postings. It could also signal trouble in your business, especially if the liabilities balance has increased significantly, exposing the company during a downturn.

Free Template: Month-End Close Checklist

Creating a month-end close checklist from scratch can be a tedious task. That’s why we put together a free and easy-to-use template for you here, which also includes 31 other customizable accounting workflow templates and checklists.

This free resource includes a ton of the most popular accounting templates including monthly bookkeeping, weekly accounting analysis, client onboarding procedures, and common tax return forms.

Options for Month-End Close Checklist

A month-end close checklist does not come in one form, which leaves you with an array of options for choosing the best format for your business needs:

• One option is a manual pen and paper form. It’s ideal if you’re a small business owner with few transactions. However, doing everything by hand can be time-consuming and tedious.

• The second option is a spreadsheet, such as the above Excel checklist template. Needing less manual labor than a pen-and-paper system, it can be ideal for small to medium-sized businesses. But, it can still be overwhelming to use and manage as your company grows.

• A third option is automation, which is ideal for any business size. Using accounting-specific software with month-end close checklists will take repetitive tasks off your plate, saving your business time and money and improving efficiency. 

Jetpack Workflow is the ideal solution for businesses seeking to automate repetitive tasks and work more efficiently. Their software offers a comprehensive and affordable suite of tools to simplify the month-end closing process.

In addition to bookkeeping software, Jetpack Workflow offers numerous templates, daily reminders, collaboration tools, detailed reports, and customer service support. Their integrations are virtually unlimited, too, helping streamline the transition for your business.

Learn more about Jetpack Workflow to discover how you can save regain control of client work, save hours of admin time, and make sure critical tasks are never missed again.