AP team performing data analysis
End-to-End AP Automation
March 21, 2024

5 Accounts Payable Reports for Better Data Analysis

by The Ottimate Editorial Team

There’s no denying the power of data to unlock financial and operational efficiency. 

Prioritizing data analysis empowers you to make better, more informed decisions about how, when, and with whom you spend your company’s money. With accurate, real-time data, you can identify bottlenecks in the invoicing process, track unnecessary spending, and mitigate potential cash flow problems.

But not all data is created equal. So, what’s the best accounts payable (AP) data to use for uncovering these valuable insights?

With the right accounts payable report, you can glean useful and actionable information about your company’s financial performance. Let’s start by covering the benefits of effective data analysis, and then we’ll dive into five key AP reports that support it.

So, Why is Data Analysis Important for AP Teams?

Data analysis, in general, is essential for optimizing processes, making informed decisions, and boosting business performance. AP teams can leverage the accurate, real-time data available in accounts payable reports to gain greater insight into their finances — and the processes used to manage them — to achieve more efficiency and visibility. 

Below are a few benefits of data analysis for AP teams:

The Benefits of Data Analysis for AP Teams:

 Improve Cash Flow Management
Identify Bottlenecks
Keep Track of Payments
Improve Your Decision Making

Improve Cash Flow Management

Cash flow is a key measurement of a company’s health. A healthy, or positive, cash flow indicates the company is financially stable and can settle debts, pay expenses, and potentially scale its operations.

As such, AP profoundly affects your company’s cash flow. 

Regularly monitoring your AP data provides in-depth insight into your expenses — allowing you to identify and cut unnecessary spending like penalty fees, duplicate payments, and even productivity loss. This helps you better manage and improve your cash flow.

Identify Bottlenecks in the AP Process

As we mentioned before, productivity loss can create unnecessary expenses for your AP team, and hence, your business. Analyzing your data regularly can help you pinpoint bottlenecks in your AP process and speed up certain tasks to become more efficient.

One common bottleneck in the AP process is approval workflows, as many teams need a more standardized process for approving invoices and payments. 

With accurate and up-to-date accounts payable data, you can easily identify what’s holding up your approvals — such as requiring too many approvals or assigning the wrong approvers — and make the necessary adjustments to ensure you’re approving everything on time. 

Learn how an integration partnership between Aptech’s PVNG accounting solution and Ottimate’s AP automation AI helps hotel accounting teams eliminate human error in manual entry and save considerable time processing invoices.

Keep Track of Payments

Keeping a close eye on payments is critical to ensuring operational and financial efficiency. The right accounts payable report will help you:

  • Assess your outgoing cash flow
  • Track outstanding invoices
  • Optimize your payment mix
  • Identify wasted spend
  • Simplify audits and reconciliations

With this data in hand, you can save money to improve your company’s cash flow, speed up processes, and spot costly errors — like duplicate payments or overpayment — that can be detrimental to your business. 

Accountant reviewing AP report

Improve Your Decision Making

Data is an essential tool for planning, analysis, and forecasting. And your accounts payable data can empower you to make data-driven decisions about where you should spend your money — and where to cut costs — to improve your financial standing. 

For example, some reports can help you identify variances in the price of goods across certain GLs and better project costs in future fiscal periods. While other reports can help you spot a month-to-month increase in the volume of invoices processed — giving you a fail-proof business case for optimizing manual workflows with AP automation AI.

In either case, AP data analysis equips you with the insights you need to drive better decision-making for your business.

5 Essential Reports for Accounts Payable Data Analysis

There are countless AP reports that you can prepare to get a clearer picture of your AP operations. But monitoring a few must-have reports regularly is a good start to effective data analysis. You can prepare these reports manually or use your AP automation software’s reporting tool to gain access to precise, up-to-date data.

These five accounts payable reports are great sources for AP data analysis, helping you uncover costly financial and operational inefficiencies:

  1. AP Aging Report
  2. Accrual Report
  3. Payment Register
  4. Spend Analysis Report
  5. Invoice Cycle Time Report

1. AP Aging Report

Let’s start with arguably the most important accounts payable report for gaining visibility into your AP operations: the accounts payable aging report. 

The AP aging report outlines the bills and invoices your company needs to pay, broken down by vendor and due date. It provides a comprehensive view of unpaid invoices by their aging bucket (or the time they’ve been in your system without being paid), including invoice approval status and outstanding balances for selected locations and vendors.  

Regularly preparing an AP aging report helps you keep an eye on upcoming bills and ensures every invoice is paid on time. It also helps with:

  • Cost-savings: Paying on time is key to avoiding penalties and securing early payment discounts, ensuring consistent cash flow for your business.
  • Reputation management: Making on-time payments fosters trust, which helps with building strong relationships and a positive reputation with vendors and suppliers.
  • Budgeting: This report provides access to historical data on your spending and debt, enabling you to optimize your credit usage or even negotiate more favorable terms.
Accountants reviewing accounts payable report

2. Accrual Report 

Another vital AP report is the accrual report, which provides a more accurate, real-time view of your company’s income and expenses. 

Goods and services are often paid with credit or invoiced at a later date. Typically, those expenses won’t appear on your company’s financial statements until the payments have been made, leaving you with an incorrect view of your financial position.

An accrual report shows all invoices in a certain fiscal period — whether paid or unpaid — providing you with a more realistic view of your expenses. This report is a useful tool for analyzing your debt, income, and financial activity within a specific timeframe.

3. Payment Register 

A payment register report records all payments made during a specific accounting period. This report typically includes the payment date, method, payee, bank account name, and invoice amount. 

A payment register can help you:

  • Gain valuable insights into your outgoing cash flows
  • Track payments made to different vendors
  • Monitor transaction volumes
  • Reconcile payments with your bank accounts

Tracking payments is critical to understanding your company’s financial performance, and a payment register report will give you access to real-time payment data.

4. Spend Analysis Report 

A spend analysis report is a great tool for analyzing expenses at an item or SKU level. It provides a detailed look at where and how you’re spending your money, helping you better manage and control costs.

With this accounts payable report, you’ll have access to current and historical spending for specific goods or services — enabling you to boost your financial performance by:

  • Identifying cost-reduction opportunities: Monitoring your spend at the item level helps you identify purchasing patterns that reveal wasteful spending and potential savings.
  • Increasing operational efficiency: Tracking your spend can help uncover inefficiencies in procurement, inventory, and supplier management that cost your company time and money.
  • Improving sourcing: This report makes it easy to assess your vendors and suppliers and their contract terms to determine which ones are most valuable to your company.
Woman analyzing AP data trends

5. Invoice Cycle Time 

Do you know how long it takes for your team to process an invoice? 

With an invoice cycle time report, you’ll receive a comprehensive analysis of the time you spend on the various processing stages, from invoice creation to invoice export. While it’s possible to prepare this report manually, it’s best to leverage an end-to-end AP automation tool for more exact, updated data.

Why is this important to know? Identifying the bottlenecks in your invoicing process helps improve operational efficiency and reduce costs. 

According to the American Productivity & Quality Center (APQC), companies that rely on manual, outdated processing methods spend up to $6 per invoice. An invoice cycle report can help you make data-driven decisions about ways to improve the process, like investing in AP automation AI, to achieve financial and operational efficiencies.

Gain Access to Accurate Accounts Payable Reports with Ottimate

Manually compiling this data and organizing it into multiple spreadsheets would likely take countless hours. You also risk extracting insights and making business decisions based on erroneous or outdated data. 

With an AP automation tool like Ottimate, not only can you leverage deep-learning technology to automate your entire invoice lifecycle, but you’ll also gain access to advanced, real-time AP analytics, providing you with valuable business insights on your operations and spend. 

From standard to advanced reports, you can access the accounts payable reports you need to track your spending habits, assess granular cost data, improve process efficiency, and so much more. 

Is your AP team well-positioned to perform in-depth data analysis? Ottimate’s AP automation AI can streamline your AP process while delivering powerful data insights that drive better performance across the board. Learn how by scheduling a demo today!

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