Importance of Accounts Payable and Accounts Receivable Templates in Excel

 Every business needs to keep track of all business finances. A good practice is to keep a comprehensive template that would allow you to see a bigger picture of every account. Two of the most important account you should look out is your accounts payable and accounts receivable since it captures both sales and purchases made on credit. A properly design accounts payable and accounts receivable templates in Excel would be of great use to help you manage your business efficiently and effectively.

Benefit of a  well-structured accounts payable template

A good accounts payable template shall allow you to manage your spending efficiently and effectively. It shall help you refine accounts payable processing and enhances cash flow prediction. It will also eliminate or avoid late payment and unnecessary charges as it will tell you which invoices are due for payment. Paying your suppliers on time will boost your power to negotiate extended payment terms, increased warranty period, and even expedite deliveries. Carefully analyzing your payables enables you to set a better position to improve business liquidity.

Advantage of using of accounts receivable template

As you offer a credit line to your regular and special customers, a good set of templates should be in place. Accounts receivable is one of your business's lifeblood and should be managed to ensure eventual conversion to cash flows. If your business fails to convert receivables into cash efficiently, it will mean severe financial trouble having poor liquidity position and crippling your working capital. The accounts receivable template shall enhance your collection procedure and cash flow prediction and allows you to plan your finances strategically.

Why do accounts receivable and accounts payable important in cash flow prediction?

Accounts payable and accounts receivable templates in excel both give you an idea of how much money you will be paying and receiving in the future. Accounts payable template allows you to see which vendor needs to be paid urgently and which could be delayed for a while as the case may be. On the other hand, your accounts receivable template would tell you how much money you would expect to receive in the future.  To optimize your cash flow, you need to align your terms for payables and receivables. If your vendors are demanding 30 days credit terms and your customers are paying 45 days, you will run out of money. Thus you need to carefully structure both agreements, which may include availing discounts and rebates for early payments or charging interest for customers late payments.  With the help of accounts payable and accounts receivable templates in Excel, you would be able to analyze your cash position and improve your liquidity, thus avoiding unpleasant operational difficulty.

Conclusion: Accounts receivable and accounts payable are equally important for business success

For a business to be successful, it is important to understand the meaning of a strong business relationship. It is not enough to pay your suppliers. You have to work with them better to get better deals. Likewise, offering properly designed sales on credit policies can be a way to attract customers and ramp up your sales. The best practice for your business to succeed is to optimize both processes using excellent and useful templates made by industry experts.