Overview: Plan for Accounts Receivable & Accounts Payable

Configure system settings to forecast Accounts Receivable & Accounts Payable

Accounts Receivable can be planned for based on an average of how quickly you expect to collect on a sale. For example, if you invoice a customer, do you expect them to pay immediately upon receipt, or will they typically pay the following month? Likewise, Accounts Payable can be planned based on how quickly you expect to pay bills on average. 

 

To configure the A/R & A/P settings, go to go to Setup ⚙️ > Company > Plans

Accounts Receivable

Select the desired account to forecast accounts receivable (A/R) from the ACCOUNTS RECEIVABLE (A/R) section and the corresponding A/R DELAY period. 

You'll have the option to select any account from the Current Asset section of your Chart of Accounts with the exception of Bank Accounts to forecast A/R. 

A/R will then be calculated as following depending on the A/R Delay selected. 

  • A/R Delay Net 0: Prior Month A/R Balance + Current Month Revenue - Current Month Revenue (no net effect)
  • A/R Delay Net 30: Prior Month A/R Balance + Current Month Revenue - Prior Month Revenue 
  • A/R Delay Net 60: Prior Month A/R Balance + Current Month Revenue - 2 Months Prior Revenue 

For example, if the A/R Balance in January was $10,000 and you had a sale of $1,000 in February, A/R balance would calculate as shown below based on the A/R Delay. 

  January February March April May 
Sales   $1,000      
           
A/R Net 0 $10,000 $10,000 $10,000 $10,000 $10,000
A/R Net 30 $10,000 $11,000 $10,000 $10,000 $10,000
A/R Net 60 $10,000 $11,000 $11,000 $10,000 $10,000

Accounts Payable

Select the desired account to forecast accounts payable (A/P) from the ACCOUNTS PAYABLE (A/P) section, select the corresponding A/P DELAY period and choose the applicable A/P ACCRUAL ACCOUNTS. 

You'll have the option to select any account from the Current Liability section of your Chart of Accounts to forecast A/P. 

The A/P ACCRUAL ACCOUNTS represent which accounts should be considered when calculating A/P. This is typically all COGS & OpEx accounts less salary related accounts, depreciation and any other non-cash expenses. 

A/P will then be calculated as following depending on the A/P Delay selected. 

  • A/P Delay Net 0: Prior Month A/P Balance + Current Month Expenses as defined by the A/P Accrual Accounts - Current Month Expenses (no net effect)
  • A/P Delay Net 30: Prior Month A/P Balance + Current Month Expenses as defined by the A/P Accrual Accounts - Prior Month Expenses 
  • A/P Delay Net 60: Prior Month A/P Balance + Current Month Expenses as defined by the A/P Accrual Accounts - 2 Months Prior Expenses 

For example, if the A/P Balance in January was $5,000 and you had a total of $600 in expenses that run through A/P in February, the A/P balance would calculate as shown below based on the A/P Delay. 


  January February March April May 
COGS - Hosting Fees   $150      
Professional Fees   $200      
Consulting/Contractors   $50      
Travel & Entertainment   $75      
S&M Expense   $125      
Total Expense Running Through A/P   $600      
           
A/P Net 0 $5,000 $5,000 $5,000 $5,000 $5,000

A/P Net 30

$5,000 $5,600 $5,000 $5,000 $5,000
A/P Net 60 $5,000 $5,600 $5,600 $5,000 $5,000

 

 

 

Additional Resource: Company Setup