The Payment Detail table Follow

Payment Detail Table - Introduction

The Payment Detail is a simple table for estimating Accounts Payable: bills to be paid as part of the normal course of business. This table uses logic and algebra to calculate Accounts Payable. It also provides an override option for special cases. The Payment Detail Table calculates Accounts Payable using assumptions for Payment Delay in Days (The number of days on average a business waits between receiving a bill and paying a bill.) and Cash Spending (Money a business spends when it pays obligations immediately instead of letting them wait for a few days first).

The Payment Detail table, and its related rows in the Start-up or Past Performance and Balance Sheet tables, are included only when you select Standard Financials (not cash-basis or Simple Financials), and say "Yes" to the Accounts Payable question in the Table Settings.

Payment Detail Specifics

The Payment Detail table calculates Accounts Payable using assumptions for Payment Delay in Days and Cash Spending.

The software uses several relatively simple assumptions:

1. Payment Delay in Days (The number of days on average a business waits between receiving a bill and paying a bill.) is an educated guess. Most businesses wait at least 30 days before paying a bill. You type this estimate into the appropriate cell.
2. Business Plan Pro calculates the estimated ending Accounts Payable balance as a function of the estimated payment delay in days and the business obligation (Business costs or expenses that need to be paid, but wait for a time as Accounts Payable instead of being paid immediately) . For example, a business that waits 30 days to pay bills will have a month's worth of bills in Accounts Payable at the end of the month. A business that waits 15 days will have half a month's bills in payables at the end of the month. A business that waits 60 days will have two months' bills in payables.  
3. Cash Spending (Money a business spends when it pays obligations immediately instead of letting them wait for a few days first) is another educated guess. A business pays some of its obligations immediately, without leaving them to wait in Accounts Payable. For example, most businesses pay their payroll immediately. Since these amounts are never included in Accounts Payable, they affect other calculations.
4. Business Plan Pro uses other assumptions in other tables to calculate New Obligations Incurred  automatically. The table shows the details. New obligations include non-depreciation expenses, interest, taxes, non-inventory direct costs of sales, and inventory purchase.

With those calculations available, the Payment Details table shows the flow of Accounts Payable from month to month with a simple row-by-row equation:

Accounts Payable = Previous Balance + New Obligations - Cash Payments - Payments Made

TIP: How do I see Row Definitions?

These pages contain conceptual help on this table as a whole. If you want detailed help with a particular row, read the row-by-row definition at the bottom of your table.