Managing payments to suppliers can become confusing, especially if there are lots to keep track of. Like with most aspects of business finance though, careful monitoring goes a long way towards keeping things running smoothly. We explain how supplier payments can affect a business, and how to keep on top of them.
Why it’s important to keep track of supplier payments
Knowing exactly what each supplier is owed, and when payment is due, is essential for budgeting and managing cash flow. These go hand-in-hand to enable good decision making.
After all, it might not be wise to spend on new inventory if that money is due to be spent on other bills first.
Not keeping supplier payments up-to-date can also be costly, too. Running over the deadline for payment terms can sometimes incur late payments fees on top of the existing bill.
These can quickly add up, and be detrimental to a good working relationship with the supplier. Learn more about our bookkeeping tools for monitoring individual suppliers.
How to keep track of supplier payments
It’s easy for us to say, but the more organised and efficient a business is with its finances, the more productive it will be.
At the very least this means recording all supplier invoices in a spreadsheet, including the amount, the supplier name, and when it’s due.
Fortunately bookkeeping software (yes, like our very own Pandle!) means that doing the business accounts is much simpler these days. The days of receipts in a carrier bag, or inboxes full of invoices, are no more.
Invoices can be added quickly and easily as soon as they come in, to help users keep track of their finances. In Pandle we have a feature called Payables. It’s a finance report which shows:
- a complete list of suppliers.
- the amounts owing to each.
- how much of the balance is within or outside of the payment terms on each particular invoice.
Using a payables report allows specific details of the supplier invoices to be seen at a glance, eliminating an administrative headache.
When there are several overdue balances, our Payables feature (or your spreadsheet) can also order invoices by due date, to better understand payment priority. Alternatively, the invoices can be ordered to display the largest balance due first.