Accounts Payable

I have 2 business that I attempt to use YNAB to generally budget. I use Quickbooks for all formal accounting activities such AR, AP, bill pay, P&L, cash flow, balance sheet, etc. Combined these businesses generate approx $2,000,000/year in Revinue.

Currently I use YNAB to import bank and credit card info. I use general categories to track expenses. Both business have AP balances that are always about 30 - 40K. AP has hundreds of entries a month so I dont want to do all that entry as it is too time consuming to track, reconcile, etc. 

Do any of you have simple suggestions for handling AP? Currently I have a budget category for AP, and I budget my avg monthly expenditure of that category. This does not take into account that like a credit card this months expenses are due next month.

To compound matters, in QB, as soon as I reconcile a credit card for payment, the payment amount goes into AP, so there is no clean correlation between QB an YNAB.

Hope my rambling makes sense.

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    • nolesrule
    • Been waiting 5 years for the Stealing From the Future fix...
    • nolesrule
    • 2 yrs ago
    • Reported - view

    YNAB is a cash allocation budget system. You should not be tracking accounts payable or accounts receivable within categories, but only dealing with actual monetary transactions and the money you have. 

    Are you actually using the YNAB budget with the business as YNAB is intended to be used or are you just using YNAB for tracking?

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  • I think I am using it as intended. My bank and credit card accounts sync and are posted to the correct budget accounts, for instance, real estate tax is due in July. I budget monthly for that 8K bill. When a parts vendor payment hits the bank, it gets posted to my AP account. QBP is very granular, I use YNAB to give each dollar a job. 

    AP functions as credit card or line of credit in my mind because it is an amount that has to be paid in the future.

    I like seeing my age of money grow, but think that it is a bit skewed without an accurate picture of what is owed (AP).

    What I think I need to do is just budget my monthly averages as I do for payroll, sales tax and other specific variable expenses.

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    • nolesrule
    • Been waiting 5 years for the Stealing From the Future fix...
    • nolesrule
    • 2 yrs ago
    • Reported - view
    Maroon Deer said:
    What I think I need to do is just budget my monthly averages as I do for payroll, sales tax and other specific variable expenses.

     You can budget your monthly averages, but you'll need to adjust if your actual outflows cause you to overspend. And for infrequent recurring expenses, you will need to budget more when you first start because you may not get a full number of months to save up before the payment is due.

     

    For example, you have an annual expense due in September. Well, you need the money in the category by September, so budgeting 1/12 in June, July, August and September won't get you there. For the first go around, you'd need to budget 1/4 in each month, 1/3 if it's due at the beginning of September.

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  • Thanks for your input. I was over thinking AP and this conversation has helped contextualize how to handle these categories!

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