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If entrepreneurs do not review or even understand their interim financial statements says Edmonton bookkeeping. They often do not have an accurate total of who they owe money to.

Not only is it a problem if they do not review this information. But failure to review their accounts payable report. Means that there could be many mistakes that they do not fix. Causing problems when their accountant and Edmonton bookkeeping company try to help them understand their business finances.

There are many questions that entrepreneurs often have for their Edmonton bookkeeping company. That can help them understand their accounts payable aging summary better.

One of the first questions is, if they are having a cash crunch, what should they do with the ADP aging summary.

Ideally, business owners will be able to get help in their business before they have a cash crunch. However, a cash crunch happens to more business owners than many brand-new entrepreneurs realize.

And in fact, 29% of all failed Canadian entrepreneurs. Cite running out of money as the reason why their business was not successful. Making this an extremely important strategy for entrepreneurs in trouble.

One of the first things that is recommended. Is that business owners identify their key suppliers. And pay those key suppliers first. In order to avoid not being able to get the supplies they need to function in their business.

The next thing that they should do, is look at their account payable aging summary. And if there are many small amounts. Just pay off those small amounts as quickly as possible.

The reason why, is because it is going to spend a lot of entrepreneurs time, having to answer many collection calls from many suppliers for a small amount.

And that time that they spend answering all those collection calls for a very small amount. They could be using to generate more income in their business. So the second thing that they should do is pay off all of the very small amounts.

The third thing that entrepreneurs should do, is create a payment plan for all other suppliers. And pay a little bit to each of the suppliers regularly.

That way, business owners will assure their creditors, that they are trying to make good on the amounts that they owe them. And will buy them more time to come up with the money.

Another question that entrepreneurs often have is, what happens if you see a positive and negative amount for one supplier?

This is an indication that an entrepreneurs has entered the invoice. As well as entered the payment. But has not applied the payment against the invoice in their accounting software.

When they see a positive and negative number in the same amounts in their accounts payable aging summary. Business owners should go into their accounting software, and ensure that they apply that payment against that specific invoice.

When business owners understand more about their accounts payable aging summary. They will be able to not only read it better. But fix mistakes. So that when they use that information to guide their financial decisions. They will be able to make better decisions.

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It is very important that entrepreneurs learn how to read their accounts payable aging summary says Edmonton bookkeeping. And to do so early as possible in their business.

This can help them make more informed financial decisions. And the earlier that they can make that are financial decisions in their business. Means the greater likelihood that they will not make decisions that could cause them financial problems.

However, many entrepreneurs have a lot of questions for their Edmonton bookkeeping company when it comes to their accounts payable aging summary.

One of the first questions that they have is quite simply. What is an account payable, or AP aging summary?

Ultimately, business owners need to understand that this report is a list of all of the money that they owe their suppliers.

It is organized horizontally on a page, showing a list of all of the suppliers that they owe money to. And in columns moving to the right, outlining how much money that the entrepreneurs owes them, based on date of their invoice.

The first column beside the suppliers, will show all of the current invoices that are not outstanding. And by the time an entrepreneur has reached the end of the six columns, it will show all of the invoices that have been outstanding for over ninety days.

Past that, there will be a grand total of how much money they owe each supplier in total. As well as an amount of money that the entrepreneur owes all of their suppliers.

This is very important to look at says Edmonton bookkeeping. Because it will help an entrepreneur understand how much money they owe their suppliers. And when using this in conjunction with their income statement.

Can show an entrepreneur how much money they have to spend in their business. Taking the amount of money that they brought in, and subtracting the amount of money that they owe.

The next question that business owners often have when it comes to their accounts payable aging summary. Is why should they be concerned with any amounts that are past due for ninety days or more.

The first reason why business owners should be concerned about this. Is because if they owe a supplier for that long. They need to immediately pay that invoice. So they can remain on good terms with their supplier.

The next reason why business owners need to be aware of all of the amounts ninety days past due in their accounts payable aging summary. Is because if they do not actually owe their suppliers anything. This typically indicates a mistake.

This often means that an entrepreneurs has entered an invoice twice says Edmonton bookkeeping. Typically because they received a paper copy as well as an electronic copy of the invoice.

When they have gone to pay that invoice. They applied to the payment on one invoice. And the other one remains in the report, causing problems.

It is very important that entrepreneurs learn how to review their accounts payable aging summary. As well as fix mistakes on it. So that they can make more informed business decisions. And do that as early on as possible in their business.