Aging Accounts Payable
What is Aging of Accounts Payable?
The aging of accounts payable report lists all the money owed by the business to suppliers, ranked by age of debt.
![aap 1](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-1.jpg)
How it Works
A business will buy goods and services on a credit basis.
![aap 2.5](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-2.5.jpg)
They record the money owed to suppliers in accounts payable.
![aap 3](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-3.jpg)
Suppliers allow a business time to pay.
![aap 4](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-4.jpg)
Each month, payment will move closer to being due.
![aap 5](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-5.jpg)
The business will make more purchases.
![aap 6](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-6.jpg)
This happens over and over.
![aap 7](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-7.jpg)
Eventually, the original accounts payable will become current and due.
![aap 8](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-8.jpg)
At this stage, the business will pay what it owes.
![aap 9](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-9.jpg)
Accounts Payable Aging Report
One way to keep track of accounts payable is with an accounts payable aging report.
![aap 10](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-10.jpg)
This report shows receivables due, set out in columns.
![aap 11](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-11.jpg)
These columns are called time buckets, each of which extends 30 days.
![aap 12](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-12.jpg)
As time moves on, the accounts payable move from one time bucket to the next.
![aap 13](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-13.jpg)
All the while, the business will add more and more accounts receivable.
![aap 14](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-14.jpg)
Eventually, the accounts payable become current and due.
![aap 15](https://seeaccountingnow.online/wp-content/uploads/2021/08/aap-15.jpg)
© R.J. Hickman 2020