Accounts payable reporting 101: Key reports, KPIs, benefits, and more

Accounts payable reporting is the process of documenting and analyzing all the money a business owes to its suppliers and vendors. It tracks bills and invoices that haven’t been paid yet, what the business owes, to whom, and when payments are due.

When businesses buy goods or services they often receive an invoice to pay later rather than pay immediately. These unpaid bills, called accounts payable (AP), are short-term debts the business must track carefully. Accounts payable reporting involves recording every vendor invoice, tracking when each payment is due, and organizing all the info so businesses can see their outstanding debts at a glance.

Without organized AP reporting, businesses can lose track of bills and end up with late payments, damaged supplier relationships, and cash shortages. On a company’s balance sheet, accounts payable appear as a current liability, which means money that must be paid within a year, typically much sooner. Accounts payable reported is found under current liabilities on the company’s financial statements, such as the balance sheet and accompanying notes, and is important for assessing a company’s liquidity and overall financial health.

Regular accounts payable reporting gives companies better control over their money and helps them make smarter financial decisions. By tracking what they owe and when payments are due, businesses can manage cash more strategically and avoid costly mistakes.

Improved cash flow management

AP reporting allows businesses to monitor cash outflows and ensure they have enough to cover upcoming bills. Accounts payable reporting also provides valuable insights into cash flows by showing how changes in AP affect the company’s cash inflows and outflows as reflected in the cash flow statement. With the ability to see all pending payments, finance teams can schedule disbursements to maintain liquidity and avoid cash shortages.

Avoidance of late fees and penalties

Keeping detailed AP records of due dates helps prevent late payments. Timely reporting means the company pays vendors on schedule, which avoids extra costs like late fees and maintains good standing with suppliers.

Better financial forecasting

AP reports provide insight into future cash needs by listing recurring expenses and upcoming obligations. This helps in budgeting and forecasting, as companies can predict and prepare for periods with heavier outflows, leading to more strategic financial planning.

Fraud detection and prevention

Regularly reviewing AP reports can catch unauthorized or unusual transactions early. By spotting discrepancies such as duplicate invoices or unexpected payees in reports, businesses can investigate and prevent fraud and protect their finances and data integrity. Reviewing a recurring invoice report can also help identify unusually high invoice amounts, which may indicate billing errors, fraud, or irregular expenses that need further investigation.

Data accuracy and compliance

Accounts payable reporting ensures financial records are accurate and up-to-date, which is crucial for compliance. Frequent reconciliation through AP reports means errors or omissions are corrected promptly, supporting reliable financial statements and smooth audits.

Strong vendor relationships

AP reports often include detailed payment history to each supplier. Using these businesses can manage vendor relationships better by paying on time and even negotiating better terms. Tracking vendor payments and being able to offer early payment discounts can further strengthen supplier relationships by showing financial reliability and mutual benefits. Vendors appreciate transparency and reliability which AP reporting facilitates.

Cost savings through discounts

Detailed AP tracking highlights opportunities for cost savings such as early payment discounts. By reporting on available vendor discounts and scheduling payments to capitalize on them, businesses reduce expenses and improve profitability.

A thorough accounts payable report must contain several critical pieces of information to be useful for financial management and decision-making.

Vendor information

Every AP report should list the vendor or supplier name for each payable. This basic but important detail is key to knowing who the money is owed to, especially if companies have similar business or legal names.

Invoice details

Include fields like invoice number, invoice date and description. These details uniquely identify each payable and provide context about what the expense is for.

Due dates / payment schedule

The due date for each invoice is important. Clearly showing due dates or aging buckets like “Current” or “30 days overdue” helps in prioritizing payments and avoiding lateness.

Outstanding amounts

Show the amount owed on each invoice and if partial payments have been made the outstanding balance. This tells the business how much is owed in total and per vendor.

Payment status

Indicates whether each invoice is pending, approved or paid. A status column helps the AP team track progress and ensure nothing slips through without action.

Account coding (GL codes)

Many AP reports tie each invoice to a general ledger account or expense category. Including GL codes or expense categories ensures expenses are properly classified, which is useful for clean financial reporting and analysis.

In addition to basic invoice data, accounts payable reports should track key performance indicators that measure how well the business is managing its payables. Businesses often use AP turnover reports and outstanding accounts payable reports to assess payment efficiency and monitor the effectiveness of their AP processes.

Days payable outstanding (DPO)

This measures the average number of days the business takes to pay its suppliers. DPO helps balance cash flow needs with vendor relationships. A higher DPO means the business holds cash longer improving liquidity, but if it’s too high it may strain supplier relationships or indicate payment difficulties.

Early payment discount capture rate

This KPI shows what percentage of available vendor discounts for early payment the business actually used. A high capture rate indicates the AP team is actively saving money by paying strategically when discounts are offered. Missing these opportunities means leaving money on the table.

On-time payment rate

The proportion of invoices paid on or before their due date. This metric reveals how well the AP process avoids late payments. A high on-time payment rate shows good payment scheduling and vendor management while a low rate might signal process delays or cash flow problems that need attention.

Error rate or discrepancy rate

This tracks how many invoices encounter errors or require exceptions such as mismatches in three-way matching. A lower error rate indicates accurate AP data and smooth processes. High error rates suggest problems in purchasing, receiving or invoice processing that slow down payments and require investigation.

Different accounts payable reports serve specific purposes in financial management, from tracking overdue bills to analyzing vendor relationships. Each report type provides unique insights that help businesses manage their payables more strategically.

Accounts payable aging reports

An AP aging report categorizes all outstanding payables by how long they have been unpaid, typically grouping invoices into time buckets such as current, 1-30 days past due, 31-60 days, and so on. For each vendor, the report shows the total amount owed and which aging category those invoices fall into. This snapshot helps identify overdue bills and prioritize payments based on urgency. Finance teams rely on aging reports to prevent late fees and maintain positive vendor relationships by ensuring no supplier waits too long for payment. Many consider this the most important AP report because it directly impacts cash management and vendor relations.

When to use this report

Use the AP aging report weekly or monthly as part of regular financial reviews. It becomes especially valuable during month-end closing to assess all outstanding liabilities. Generate this report whenever you need to understand current payment obligations and identify overdue accounts. The aging buckets help finance teams project cash needs for the next 30, 60, or 90 days, making it essential for cash flow planning meetings.

Payment analysis reports

A payment analysis report examines historical payment data to reveal spending patterns and identify unusual transactions. This report consolidates all outgoing payments over a specified period and breaks them down by various criteria such as time period, expense category, or department. Rather than just listing bills, it analyzes cash outflows to show trends like monthly spending variations or rapid growth in certain expense categories. Payment analysis can flag anomalies, such as unusually high payments to a vendor, prompting further investigation. These insights help finance teams understand spending patterns and identify opportunities for cost control.

When to use this report

Generate payment analysis reports quarterly or annually when reviewing spending trends or preparing budgets. Pull this report when management asks about expense increases in specific areas or when you need to understand historical spending patterns. It proves particularly valuable during budget planning sessions, as it shows where costs have been rising and helps forecast future expenses. Also use it when investigating potential irregularities in payment data.

Vendor reports

Vendor-specific reports consolidate all payables and payment history by supplier, showing metrics like total spending, average payment time, and current outstanding balances. Top vendor reports rank suppliers by payment volume, revealing which vendors receive the most business. These reports help evaluate supplier relationships and identify opportunities for negotiation. By seeing annual spending with each vendor, companies can approach high-volume suppliers for better terms or bulk discounts. Vendor reports also ensure consistent payment treatment across suppliers and highlight any vendors frequently being paid late.

When to use this report

Run vendor reports before supplier negotiations or contract renewals to understand your payment history and spending volume with that vendor. Generate these quarterly to monitor supplier relationships and identify consolidation opportunities. Use them when evaluating vendor performance or when finance leadership wants to know which suppliers represent the largest expenses. They also help during vendor meetings by providing concrete data about the business relationship.

Accounts payable reconciliation report

An accounts payable reconciliation report compares AP records with general ledger entries and external statements to ensure accuracy. It lists all AP transactions including invoices entered, payments made, credits applied, and adjustments, then verifies these match the general ledger totals. This process catches discrepancies such as invoices marked paid in the AP system but not properly recorded in the ledger. Reconciliation maintains data integrity and ensures financial statements accurately reflect the company's obligations.

When to use this report

Generate AP reconciliation reports monthly during the closing process to verify AP sub-ledger matches general ledger balances. Always run this report before audits to ensure all records align. Use it whenever discrepancies arise between different financial records or when the AP aging total doesn't match the balance sheet figure. Regular reconciliation prevents small errors from becoming major problems.

Voucher activity report

A voucher activity report tracks all payment authorizations processed during a specific period, showing details like voucher numbers, dates, amounts, and approvers. Since vouchers represent approved payments, this report provides insight into the approval workflow. It can be filtered by department, project, or other criteria to show targeted payment information. The report helps identify approval bottlenecks when vouchers remain pending too long and ensures proper authorization for all payments.

When to use this report

Use voucher activity reports for targeted analysis, such as reviewing all payments for a specific project or department. Generate them when management needs details about spending in particular areas. Run these reports to monitor approval workflows and identify delays in the payment process. They prove especially useful during audits to demonstrate proper payment authorization and internal controls.

AP trial balance report

The accounts payable trial balance report summarizes all AP transactions within a period and confirms the total matches the general ledger AP account. It lists each vendor's balance and provides transaction details that support the total AP liability. This report verifies that individual payables properly roll up to the balance sheet figure, serving as a key accuracy check for financial statements.

When to use this report

Generate AP trial balance reports at month-end and quarter-end as part of the closing process. Use them before releasing financial statements to verify the AP balance sheet figure has proper supporting detail. Auditors frequently request this report to confirm AP completeness and accuracy. Run it whenever you need to validate that detailed AP records justify the summary balance sheet amount.

Open invoice report

An open invoice report provides a detailed list of all unpaid invoices as of a specific date, typically showing vendor, invoice number, date, and amount for each outstanding bill. Unlike aging reports that group by time periods, open invoice reports present a complete line-by-line view of current liabilities. This granular detail helps AP teams verify all bills are recorded and plan upcoming payment runs.

When to use this report

Run open invoice reports weekly or bi-weekly to support payment processing decisions. Use them before cash flow meetings to answer questions about current obligations. Generate this report during reconciliation to ensure no invoices are missing from the books. It serves as a quick reference when vendors inquire about payment status for specific invoices.

History of payments report

A history of payments report documents all payments made during a specified period, detailing payment dates, amounts, vendors, and related invoices. This historical record proves invaluable for auditing past transactions and answering vendor questions about previous payments. It helps verify that all disbursements were legitimate and properly recorded while providing data for expense analysis.

When to use this report

Use payment history reports during audits to provide evidence of disbursements. Generate them when vendors claim missing payments or when investigating past transactions. Pull these reports annually for budget planning to understand historical spending patterns by category. They also help resolve payment disputes by showing exactly when and how payments were made.

Discount report

A discount report identifies all invoices offering early payment discounts and tracks whether the company captured those savings. It lists available discounts, their terms, and payment deadlines, then shows which discounts were taken and which were missed. This focused view helps AP teams maximize cost savings by highlighting time-sensitive payment opportunities.

When to use this report

Review discount reports weekly when planning payment runs to identify which invoices should be paid early for maximum savings. Generate them monthly to assess discount capture performance and identify improvement opportunities. Use these reports when cash is available for strategic early payments that will reduce costs. They help justify AP process improvements by quantifying potential savings.

Credit memo report

A credit memo report tracks all vendor credits available to offset future payments, showing credit amounts, reasons, and remaining balances. Since credits represent money owed back to the company, tracking them prevents overpayment. The report ensures all available credits are applied before paying vendors full invoice amounts.

When to use this report

Run credit memo reports monthly and always before processing payments to specific vendors. Check this report when reconciling vendor statements to ensure both parties agree on credit balances. Use it during period-end closing to properly state vendor liabilities net of credits. Generate it whenever paying a vendor with outstanding credits to ensure those credits are applied correctly.

Following established best practices helps companies extract maximum value from their AP reporting while minimizing errors and inefficiencies. These practices transform AP reporting from a routine task into a strategic business tool.

Use automation when possible

Modern AP software and automation tools dramatically improve the speed and accuracy of accounts payable reporting. Invoice scanning technology using optical character recognition (OCR) captures payment data automatically, eliminating manual entry errors like transposed numbers or typos. Electronic workflows route invoices to the right approvers instantly, preventing delays from invoices sitting on desks.

Automated tools can generate real-time dashboards showing current liabilities, upcoming due dates, and payment trends without manual compilation. These tools also send alerts when invoices approach due dates, helping prevent late payments.

Rather than spending hours creating reports, finance teams can access up-to-date information instantly and focus on analyzing data instead of gathering it. Companies that invest in AP automation see fewer payment errors, faster processing times, and more accurate financial reporting.

Regularly audit accounts payable records

Conducting monthly or quarterly reviews of accounts payable records maintains accuracy and builds confidence in financial data. Regular audits involve comparing AP sub-ledgers with general ledger balances, matching vendor statements to internal records, and verifying that all large invoices have proper approvals.

These reviews catch problems early, such as duplicate payments, missing invoices, or incorrect data entry, before they grow into larger issues. During audits, teams should verify that payment approval processes are being followed and that supporting documentation exists for all transactions.

Consistency matters most in audit schedules; checking records monthly makes it easier to spot and fix small errors than waiting for year-end reviews. Well-documented audit procedures also prepare companies for external audits by maintaining clean, organized records throughout the year.

Continuously keep trying to improve processes

Successful AP departments constantly look for ways to enhance their reporting processes and accuracy. This starts with tracking KPIs like on-time payment rates and discount capture percentages, then setting targets for improvement. When metrics fall short, teams should analyze root causes and adjust processes accordingly.

Staff training plays a vital role, ensuring everyone understands both the software tools and the importance of accurate data entry. Regular team meetings can surface common problems and generate solutions from those closest to the work.

Technology updates deserve attention too; new features in AP software or reporting tools might streamline processes further. Companies should also seek feedback from report users about what information helps them most and what additional data would improve decision-making.

Despite best efforts, most AP reporting processes don’t go as planned. Here are some of the top challenges and practical solutions to help companies build better AP processes.

Data errors

AP reporting is only as good as the data entered into the system. Manual data entry mistakes like typos, transposed numbers or missing decimal points create reports with incorrect totals. Invoices get lost when they come in through different channels or get buried in email inboxes. Duplicate entries happen when the same invoice is entered twice by different team members.

These errors erode trust in financial reports and can lead to wrong payment decisions. A report showing lower payables than reality might cause cash shortages while inflated figures might delay necessary purchases.

The solution starts with automation tools like invoice scanning and optical character recognition (OCR) to reduce manual entry. Three-way matching between invoices, purchase orders and receipts catches discrepancies before they get into reports. Regular reconciliation processes are safety nets to identify and correct errors quickly.

Train staff to double-check their work and create a culture that values accuracy over speed. Some companies have a second person review critical data entries, so mistakes are caught before they get into reports.

Slow processing

Slow invoice processing creates incomplete and outdated reports. Paper-based workflows stall when invoices wait for approval from busy managers. Manual routing between departments adds days or weeks to processing time. Long approval chains mean invoices pile up and any reports generated during this time will be incomplete.

These delays cause multiple problems. Late payments can damage vendor relationships and incur fees. Finance teams can’t forecast cash needs when many invoices are unprocessed. Month-end closing becomes rushed and error-prone when teams are trying to enter accumulated invoices.

Electronic invoice workflows solve many timing issues by routing invoices to approvers with built-in reminders. Set service level agreements (SLAs) for approval times to create accountability. For example, require all invoices to be approved within 48 hours to keep the process moving. Companies should also have a central digital repository for invoices instead of paper files or scattered emails. Simplify approval hierarchies where possible without sacrificing controls.

Poor communication

Communication gaps both inside the company and with vendors create reporting problems. When the purchasing department doesn’t tell AP about disputed invoices, those bills get paid incorrectly. When vendors change their billing address or banking details without notification, payments go astray. Missing information about contract terms or special pricing arrangements leads to payment errors.

Internal communication failures mean AP teams work with incomplete information. They might not know about returned goods, quality issues or negotiated discounts. This means overpayments, missed credits and inaccurate liability reporting.

Vendor communication problems cause their own issues. Without clear channels for vendors to submit invoices or check payment status, suppliers flood AP departments with calls and duplicate invoices.

That’s why you’ll want to create structured communication processes. Regular meetings between AP, purchasing and receiving departments ensure everyone is informed about invoice issues. A dedicated vendor portal or email address for invoice submissions and inquiries reduces confusion and duplicate submissions.

Keep vendor contact information up to date through regular updates to prevent misdirected payments. Internal ticketing systems for invoice disputes also create clear workflows and documentation. When communication channels are defined and maintained, many reporting errors disappear.

Good accounts payable reporting does more than track bills. It strengthens operations across the entire company by providing visibility, control, and data for better decisions.

Process oversight and improvement

Accounts payable reports like voucher activity and open invoice reports give managers clear visibility into payment workflows. When a voucher activity report shows multiple payments stuck in “pending approval” status for weeks, it reveals a bottleneck in the approval process. This insight allows companies to investigate the cause, perhaps finding that one approver handles too many invoices or that approval limits need adjustment.

Regular report reviews help teams spot patterns and fix problems before they grow. If payment delays consistently occur in one department, managers can provide additional training or resources. When invoice processing times increase during certain periods, companies can plan ahead with temporary staff or adjusted deadlines.

AP reports also measure the impact of process changes. After implementing a new approval workflow, teams can track whether invoices move faster through the system. Payment on-time rates show if new procedures actually improve vendor relationships. This feedback loop of reporting, analyzing, and adjusting creates increasingly efficient operations over time.

Error and fraud prevention

Routine AP reporting serves as an important detective control against both mistakes and fraudulent activity. A payment history report might show an unusual spike in payments to a typically small vendor, prompting investigation. This could reveal a legitimate large purchase, a duplicate payment, or potentially fraudulent activity.

Vendor analysis reports can also expose payments to unrecognized suppliers, which might indicate fake invoices or compromised payment processes. Regular reconciliation through AP reports can prevent duplicate payments and overpayments before they become expensive mistakes.

The audit trail created by detailed AP reporting also deters internal fraud. When every invoice links to specific approvals and payments, employees know their actions are traceable. This accountability, combined with regular report reviews, makes it much harder for fraudulent payments to go unnoticed. Small errors caught early through reporting prevent them from snowballing into major financial discrepancies.

Compliance and audit readiness

Well-maintained AP reports keep companies prepared for audits and compliant with financial regulations. When auditors or management request specific information, such as all payments to a particular vendor last year, AP teams can produce reports quickly instead of searching through boxes of paperwork.

Many financial regulations require accurate recording of liabilities and proper documentation of payments. Regular AP reporting ensures companies follow accounting standards by recording payables in the correct periods and maintaining supporting documentation. An AP aging report showing minimal overdue accounts demonstrates that financial controls work properly.

Accounts payable reporting gives businesses visibility and control over their financial obligations and turns bill payment into a strategic business function.

Through tracking what companies owe, to whom and when payments are due, AP reporting delivers tangible benefits. Organizations get better cash flow management, avoid late fees and capture early payment discounts. Strong reporting practices also detect fraud, ensure compliance with financial regulations and build better relationships with suppliers through timely payments.

The various report types discussed, from aging reports to vendor analysis, each serve a purpose in managing payables. By using automation, regular audits and continuous process improvement to your advantage, you can get the most out of your AP reporting while minimizing errors and inefficiencies. Even when faced with common challenges like data inaccuracies or communication gaps, there are solutions to strengthen AP processes.

Companies looking to implement these best practices should try Brex’s financial platform. Brex combines AP automation software with spend management software, corporate cards, and automated bill pay to create a single, efficient solution for expenses and payments. The platform automatically captures invoice data, routes approvals and generates real-time reports without manual data entry, reducing errors and saving hours of work each week.

Brex’s integrated approach means all spending data flows into one spend management software, whether from corporate card purchases, vendor invoices or employee expense reimbursements. This consolidated view enables better financial decisions and stronger controls while simplifying compliance and audit preparation.

Mark Salvioli, Senior Manager US Finance at Northern Data, says Brex bill pay helps the high-performance computing and AI company move faster: “We love having a place to save all of our invoices, vendors, and their payment instructions. It allows us to easily compare new charges to historical ones and make sure we have already budgeted for the expense — without having to search or re-enter information.” Tiffany Miller, Director of Accounts Payable at Empire Portfolio Group, adds: “With Brex, we’ve seen a huge shift in accounts payable from being a back-office data entry function to a powerhouse of information that creates a decision maker and stakeholder.”

To see how Brex can transform your accounts payable processes and overall financial operations, sign up for a demo today and experience firsthand the power of modern AP automation software.