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Working with Accounts Payable

Understanding Accounts Payable​

Accounts Payable (AP) is a key component in accrual accounting. It's a record of what your business owes to suppliers or vendors, including goods or services you've bought on credit but haven't paid for yet. In Fiskl, Accounts Payable is used to record future payments that you owe to vendors and suppliers.

While there isn't a specific "Bills" entry screen in Fiskl, you can use the Accounts Payable feature to record and manage your bills. This approach aligns with accrual accounting principles and provides a comprehensive view of your future payment obligations.

Fiskl's AP account helps you track these amounts in multiple currencies, displaying the total in your base currency. This feature allows you to easily see how much you need to pay without any surprises, making financial planning and cash flow management more efficient.

note

For payments that have already occurred, use Operating Expenses or other relevant Expenses accounts instead of Accounts Payable.

Let's explore how to create and manage Accounts Payable entries, including bills, in Fiskl.

Creating a Basic Accounts Payable Entry​

Follow these steps to create a basic Accounts Payable entry or bill in Fiskl:

  1. From the left menu, click on "Purchasing" and select "Accounts Payable".
  2. Click on the "+In" button to create a new entry.
  3. Complete the following fields:
    • Date
    • Name or number for your entry (e.g., "Broadband bill" or "Office Supplies Invoice #1234")
    • Category (select from the dropdown or create a new one)
    • Tax (if applicable)
    • Amount (in your default currency)
    • Vendor (select or create a new one)
    • Bill number (if applicable)
    • Client (if relevant to a specific client)
  4. To attach supporting documents, such as a scanned copy of the bill, click on the attach button.
  5. Click "Create" to save your Accounts Payable entry.
Why is managing Accounts Payable important?

Proper AP anagement helps you:

  • Track your short-term obligations
  • Accurately report your financial position
tip

If the balance in your Accounts Payable account is zero, it means you currently have no future payments or liabilities recorded.

Creating an AP Transaction​

To record a new Accounts Payable transaction:

Take an interactive walkthrough of creating an Accounts Payable transaction
  1. Go to Accounting > Transactions from the left menu
  2. Select "Accounts Payable" from the account list
  3. Click "+In Credit" to create a new AP transaction
  4. Enter the transaction details:
    • Name
    • Category
    • Amount
    • Currency (if different from base currency)
    • Vendor
    • Reference number (optional)
    • Description (optional)
  5. Attach any relevant documents by clicking the attachment button
  6. Click "Create" to save the transaction

Your new AP transaction will now appear in the Accounts Payable list and the corresponding expense account.

Matching AP Transactions with Payments​

Take an interactive walkthrough of matching an accounts payable transaction

When you pay an AP transaction, you need to match it with the payment in your bank or credit card account:

  1. Go to the relevant bank or credit card account
  2. Find the relevant transaction
  3. Select "Show matches"
  4. Choose the corresponding AP transaction from the list
  5. Select "Update" to confirm the match

In the Accounts Payable section, you will find two transactions associated with this transaction. The initial transaction logs the future expense, while the subsequent transaction records its payment. Consequently, the outstanding balance for this payable is zeroed out. These updates are reflected in the account transactions and are visible on your Balance Sheet, Transactions by Account and Trial Balance reports.

Working with Foreign Currency AP Transactions​

Fiskl supports AP transactions in multiple currencies:

  1. When creating an AP transaction, select the appropriate currency
  2. The transaction will display both the foreign and base currency amounts
  3. When matching, you will be presented with matches in all currencies. You can filter these to specific currencies using the currency selector
  4. Select the correct match, and adjust the exchange rate if necessary

For payments covering multiple foreign currency invoices:

  1. Select all relevant matches from the list
  2. Use the "Auto-adjust FX rate" option to proportionally adjust exchange rates if needed
  3. Click "Create" to finalize the matched transaction

Splitting AP Transactions​

You can split a single AP transaction across multiple categories, currencies, or vendors:

  1. Create or open an AP transaction
  2. Click "Split"
  3. Add details for each split:
    • Amount
    • Category
    • Currency (if different)
    • Tax information (if applicable)
    • Vendor (if different)
    • Client (if applicable)
  4. The "Difference" field shows any remaining amount to be allocated
  5. Click "Create" to save the split transaction

Each split will appear in its respective account, providing detailed transaction tracking.

Remember, accurate AP management is crucial for maintaining your business's financial health and relationships with suppliers.