An Aged Creditors Report can be called many things, Aged Suppliers Report, Aged Outstanding Invoices Report and other name combinations. What it is, is a list of who your business owes money to and how old the unpaid invoices are. If this is September, it may show you the amount you owe each supplier for August, July, June and going back further if necessary. It can also list each individual unpaid invoice. Here is an example of an aged creditors report.

Aged Creditors Report at 31st August

What useful information does this report give us

1. How much in total you owe suppliers
2. How old is the debt you owe. In this case there are unpaid transactions going back to April
3. How much you owe each supplier
4. How old the debt is for each individual supplier

By looking at each supplier, problems with supplier accounts may be highlighted.
In our list above we have two suppliers with unpaid invoices going back to April.
Is this because?
a) There is a problem with an invoice
b) The invoice should not have been recorded as it was not for us
c) You can't pay it because we have no money
d) The supplier says we do not owe it (someone else may have paid it with their own money and forgot to claim the money back from the company)

Supplier accounts with negative balances mean
a) You paid a deposit and are awaiting an invoice
b) You never got an invoice
c) The payment was entered into the wrong suppliers account
d) Fraud, we paid out when we should not have

If we never got the invoice, then we never got to claim back the VAT and reduce our VAT liability. Also our costs are understated by the missing invoice amount and so are profits are overstated.

By looking at the report and the age of the debt, we can use this information to forecast our cashflow. If we have 30 days credit with a supplier then we know that the amount owed in July is not due to be paid until 1st September. Based on the Aged Creditors report above we are due to pay out 7,000 on the 1st September. €3,000 of June Invoices were to be paid on 1st August but have not. This should be investigated.

So the Aged Creditors report gives you a lot of information and can help you with not just knowing who you owe money to and when it needs to be paid, but also will help with forecasting cashflow, checking for missing invoices to claim back the VAT and ensure proper costs show in your Profit and Loss every month and helps you manage your suppliers by giving you a monthly summary of what happened during the month.

So print an Aged Creditors report every month and use the information on it to help manage your business and save you money.