Accounts Payable Template is a ready-to-use template in Excel, Google Sheets, and Open Office Calc that helps you to easily to record your payable invoices all in one sheet. Just download the template and start using it entering by your company details.
Furthermore, it consists of a payment section that lets you know the outstanding payable amount to the supplier against each invoice.
Table of Contents
What is Accounts Payable?
As per Wiki
Accounts payable is money owed by a business to its suppliers shown as a liability on a company’s balance sheet. It is distinct from notes payable liabilities, which are debts created by formal legal instrument documents.
In simple terms, accounts payable ledger consists of the list of suppliers along with details like invoice number, date of invoice, date wise payments made, and outstanding balance.
Role of Accounts Payable
Accounts Payable consists of 3 basic functions:
- Report and pay external business expenses.
- Make internal payments.
- Monitor and process Vendor payments.
Larger businesses require staff to travel for business purposes. Accounts Payable department manages such travel arrangements which include advance airline, car rental as well as hotel reservations.
Other business functions include making payments for AMCs and other maintenance expenses for the smooth running of the business.
Furthermore, it is also responsible for distributing internal payments such as reimbursements, controlling, petty cash, and distribution of corporate taxes.
In addition to the above, the accounts payable department verifies purchases, aging analysis reports apart from vendor management.
What is Accounts Payable Process?
Accounts payable is a 4 step end-to-end process:
- Receiving the bill.
- Checking the bill details against the PO.
- Record invoices into the accounting system.
- Reviewing and making timely payments.
Additionally, account payable prevents payments of fraudulent invoices or multiple payments for the same invoice to vendors. Proper reporting of invoicing helps to ensure that a company’s cash and assets are safe.
Accounts Payable Journal Entries
Accounts payable consists of 2 scenarios that require journal entries: first is checking of goods against invoice and reporting the invoice into the system. The other is making payment for the invoice.
Journal Entries For Recording Invoice
Purchase A/C – Debit
To Accounts Payable A/C – Credit
In the case of a regular vendor, the Vendor account will be debited instead of purchase.
Journal Entries For Paying Invoice
Accounts Payable A/C – Debit
To Cash or Bank A/C – Credit
In the case of a regular vendor, the Vendor account will be debited instead of Accounts Payable.
Journal Entries For Purchase Return
Accounts Payable A/C – Debit
To Purchase Return Account – Credit
Journal Entries For Purchase With Discounts
Accounts Payable A/C – Debit = Rs. 10,000
To Cash or Bank A/C – Credit = Rs. 9,000
To Purchase Discount A/C – Credit = Rs. 1000
The sum of both credit amounts must be equal to the debit amount.
Accounts Payable Template
We have created simple and easy Accounts Payable Templates in with predefined formulas and functions. Insert invoices and it will automatically display the outstanding against each invoice.
Important Note: To edit and customize the Google Sheet, save the file on your Google Drive by using the “Make a Copy” option from the File menu.
Let us discuss the templates
Content of Accounts Payable Template
This template consists of 2 sections: Vendor details and Payment Details.
Row 1 = Enter Company/Business Name. Cells A1 to AD1. Merged cells.
Row 2 = Heading of the sheet. Cells B2 to BD2. Merged cells. Headings can put as Accounts Payable Ledger or Creditors Ledger.
Row 3 = Multiple headings as numbered below
- The subheading for the Current Date in A3.
- Next cell B3 will reflect the current date of the system using the formula =TODAY(). The date will automatically change according to the system date. You don’t need to change it every time and this saves your time.
- The next column for Total Due to date. The cell next to it reflects the total of column F which is the balance of each supplier. The formula applied here is =SUM(F5: F23).
Row 4 = This row consists of subheadings for data input. For example, see the table below:
Invoice and Payment Details
Date, Invoice number, Supplier name, Amount of Bill, payment 1, and payment 2 and their respective date are details to be put while entering data.
For the Due date, you can set a function that automatically calculates several days for you and will show the exact date of payment. For this you will set the function as shown below:
= cell address which contains date + Number of days for allowed.
Here in our sheet, it is 45 days. So the formula entered is =A5+45. Copy this to all the cells below this cell, this will apply the same settings to all cells below.
Balance Amount here is calculated by deducting the total amount of bills – Sum(Payment1+payment2) etc. In this template formula used is =D5-SUM(H5+J5+L5+N5+P5+R5+T5+V5+X5+Z5+AB5+AD5).
Furthermore, you can also download Accounts Payable Template With GST(Goods and Services Tax) as well as Accounts Payable Template With VAT(Value Added Tax).
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Frequently Asked Questions
What is a Non-PO Invoice?
A Non-PO invoice is an invoice that does not have a purchase order. However, such invoices require approval from authorized personnel to process for payment.
Difference between account payable and bills payable?
Unsettled invoices of an organization refer to Accounts Payable whereas accepted, paid recorded bills of an organization are Bills Payable.
What Is Included in Accounts Payable?
Accounts payable are a collection of short-term credits extended by creditor/vendors. The accounts payable also includes internal business, employee/employer travel as well as petty cash.
What is 3 Way Matching in Accounts Payable Process?
3-way matching is a process of comparing and matching the contents of the Purchase order, Delivery Receipt or Packing slip, and the Invoice.
What is a tolerance limit concerning invoice processing?
Minor differences in amounts of invoices as agreed upon or as per the industry norms are acceptable for which doesn’t require any further approval.
What is a debit balance recovery?
Debit Balance is when a buyer makes an excess payment with no pending invoices to a supplier/vendor. Debit balance recovery is the process to recover such amount.
How to initiate Debit Balance Recovery?
You can initiate debit balance recovery by communicating with the vendor for the excess amount. Thus, you can settle these amounts either through cash, bank transfer, or can be adjusted against future invoices. In case no future transactions with the vendor and failing to recover this balance has to be written off.