As we mentioned in our first blog post on preparing your annual business financial reporting, there’s a lot of work to be done. Once you’ve got your bank account and company credit card reconciliation in place, next you need a list of unpaid customer invoices (your Aged Debtors report) and a list of unpaid supplier invoices (your Aged Creditors report).

What is it? An Aged Debtors report shows who owes your business money. If you extend credit terms (that is, if you invoice a customer and they pay you after they’ve received the goods or service) this report shows who owes you and what they owe you in a set period of time.

An Aged Creditors report is the same, but in reverse. It shows who your business owes money to and what you owe in a set period of time.

Why do it? Firstly you are legally required to file records showing a record of all the assets and liabilities of the company: debtors and creditors are counted as assets and liabilities respectively and therefore must be included.

Secondly it is an essential part of cashflow management for your business to know what money should be coming in alongside how much and when you need to pay money out. These reports help you know which customers to chase for payment, to understand if you have enough money due in to cover your commitments and also to schedule your payments to suppliers to optimise your cashflow.

How can a bookkeeper help?

If we’re already looking after your books, it is a very simple matter to prepare the list of unpaid customer invoices and list of unpaid supplier invoices as we’ll have access to this information already. In fact, we’ll almost certainly already be advising you that you need these reports on a monthly or quarterly basis to run your business!

If you’ve been looking after your own books or had a member of the family doing this for you, we can reduce the stress of creating the necessary reports. As qualified bookkeepers we prepare these (and a number of other reports) all the time and for many different clients. Let us take away the drain on your time and the worry of making a mistake that could lead to fines or penalties.

We can even give you advice on what these reports tell you about your business and help you act on them. We can support you with chasing customers who pay late and ensuring supplier payments are made within your agreed payment terms.

If you’re not sure your current approach to gathering your annual financial reporting works well for you then why not give us a call? We’re always happy to have an informal chat: if you’d like to see if we can help please get in touch with Diane on 01825 763378.