The Account Payable Ageing report provides a quick snapshot of the amount that your business owes to other companies for the supplies of goods and services received. The report should reflect relatively current amount if the business have been paying its creditors promptly. This means the business is in a healthy cash flow situation and have no problem paying what is owes.
Otherwise, old amounts such as 90 days overdue that shows up in the report may indicate disputes with creditors or the inability to pay due to cash flow issues.
This report will come in handy when you want to control your business cash flow. Sometimes you may want to take advantage of the trade credit so you can deploy your cash to seize on business opportunities that may come your way. By being aware of the situation, you can take the necessary steps to expand your business successfully.