One thing that business owners can do to increase their chances of succeeding according to Edmonton bookkeeping. Is learn how to read their accounts payable summaries. The reason why, is because these will help them understand how much money they owe. And who they owe money to.

Then, when they are looking at their financial statements. They will be able to understand how much money they have to spend. And how much should go to bill payments.

However, many entrepreneurs do not do this. Because they do not know how to read the report. Or understand what the information is indicating.

When business owners are looking at their accounts payable aging summary. They will notice that it is oriented horizontally on a page. And there will be columns going from left to right.

The first far left column. Will be a list of all of the suppliers that an entrepreneurs owes money to. The second column beside that, is a list of all of the money that an entrepreneurs currently owes them, and are not past due.

Beside that column, will be a list of the invoices that an entrepreneurs owes the suppliers that are thirty days past due. And as each column moves to the right. They represent invoices that are due for longer periods of time.

On the far right, will be a column that shows invoices that are over ninety days due. And the final column to the right, shows a total of all of the money that the entrepreneur owes each business. With a grand total of all of the money that an entrepreneur owes suppliers at the bottom.

This is very important to note. Because a business owner should be staying on top of invoices. Ensuring that they do not age for a long period of time.

This will help entrepreneurs maintain a good relationship with their suppliers. But also, by ensuring that they are paying invoices before they reach ninety days overdue or more. Can help them catch any errors that might be on this statement.

Business owners should watch their accounts payable aging summary says Edmonton bookkeeping. And look at any amounts that are over ninety days past due. Because these are often an error.

The error typically is in this case. Is an invoice that was accidentally entered it twice. Because as the business owner pays the invoice, it will cancel out one of the invoices. Leading the other two remained on the summary.

Therefore, when business owners review their accounts payable aging summary. And see that there is an invoice ninety days due or longer. They should look to see who was accidentally entered twice. Which can happen quite easily. If they receive a paper copy as well as an electronic copy from their supplier.

This can also indicate that a business owner accidentally entered the incorrect amount when manually entering the invoice. And if it is larger than what the invoice actually is.

As they entered the payment amount, it would leave a balance remaining on the account. Creating an overdue invoice that should not be there, says Edmonton bookkeeping.

When business owners are able to understand how to read their accounts payable aging summary. They will be able to catch mistakes. And ensure that it represents all of the money that they owe. So that they can make more informed financial decisions.

Am I doing my Edmonton Bookkeeping wrong?

 

One of the first things that business owners should learn says Edmonton bookkeeping. When they first opened up their business is how to read financial statements.

This can help entrepreneurs understand what is going on financially in their business. So that they can make more informed decisions.

In fact, running out of money is the second most common reason why Canadian entrepreneurs fail. So by learning how to read interim financial statements early on in their business ownership.

Can help entrepreneurs make better financial decisions. And be able to avoid making mistakes that would cause them to run out of money.

However, it is not enough that entrepreneurs need to be able to read the statements. They also need to be able to review them and catch any errors that exist.

By being able to easily catch mistakes. And then fix those mistakes, Edmonton bookkeeping says they will be able to ensure the accuracy of their accounts payable aging summary. And that will help them make better decisions.

One of the first things that business owners can scan their accounts payable aging summary for. Our negative numbers anywhere on the report.

Because while a negative number does not necessarily mean it is a mistake. It typically indicates that a business owner has either prepaid something. Or they have overpaid an invoice.

And while it is not impossible that a business owner has overpaid or prepaid a supplier for products or services. This is less common, therefore easy to look for, and fix if it is a mistake.

If a Edmonton Bookkeeping business owner can verify that they did not pay a deposit, and they have not overpaid. The likely reason why a negative number which show up on their accounts payable aging summary. Is because an entrepreneur may have forgotten to enter the invoice.

They forgot to enter the invoice, but they entered the payment that they gave to that supplier. Making it look like there is a deposit for supplier, but they have not received the invoice yet.

Business owners who see a negative number, and know that they did not pay a deposit to a supplier. Can look for the invoice that they may have missed entering. In order to fix that negative number. And get a more accurate amount of how much they owe that supplier. And all the suppliers in general.

Another thing that business owners can look for when they are scanning the report for errors. Is if they see any round numbers. Perfectly round numbers with no cents typically indicates that an entrepreneur has entered an estimate confirms Edmonton bookeeping.

Since invoices typically have sales tax added to them, which makes the number not around anymore. This should be an indication for a business owner to verify the total amount on the actual invoice. So that their accounts payable aging summary represents the actual amount they owe that supplier.

Because of how important this summary is. When the owners learn not only how to read it. But learn how to fix mistakes on this report. They will be able to have a better idea of their business finances. That will allow them to make more informed decisions.