How To Calculate Accounts Payable Turnover in BQE CORE | Arithmix

Calculating accounts payable turnover is an important aspect of managing your business finances. It helps you understand how quickly you are paying your suppliers and vendors. In BQE CORE, calculating accounts payable turnover is a simple process that can be done in just a few steps.

The first step is to gather the necessary information. You will need the total amount of accounts payable for the period you are interested in, as well as the cost of goods sold for the same period. Once you have this information, you can move on to the next step.

The next step is to divide the cost of goods sold by the average accounts payable for the period. This will give you the accounts payable turnover ratio. The higher the ratio, the more quickly you are paying your suppliers and vendors.

It is important to note that the accounts payable turnover ratio should be calculated on a regular basis, such as monthly or quarterly, to ensure that you are staying on top of your payments and managing your cash flow effectively.

What Is Accounts Payable Turnover?

Accounts payable turnover is a financial ratio that measures how quickly a business is paying its suppliers and vendors. It is calculated by dividing the cost of goods sold by the average accounts payable for a given period.

The accounts payable turnover ratio is an important metric for businesses to track, as it can provide insight into their cash flow management and financial health. A high accounts payable turnover ratio indicates that a business is paying its suppliers and vendors quickly, which can help build strong relationships and improve creditworthiness. On the other hand, a low accounts payable turnover ratio may indicate that a business is struggling to pay its bills on time, which can lead to strained relationships and financial difficulties.

When Is It Valuable To Calculate Accounts Payable Turnover?

Calculating accounts payable turnover is valuable for businesses of all sizes and industries. It can help business owners and managers understand how quickly they are paying their suppliers and vendors, which can impact their cash flow and financial health.

For businesses that rely heavily on suppliers and vendors, such as those in the manufacturing or retail industries, calculating accounts payable turnover can be particularly valuable. It can help them identify areas where they can improve their payment processes and build stronger relationships with their suppliers and vendors.

Additionally, calculating accounts payable turnover can be valuable for businesses that are looking to secure financing or credit. Lenders and investors often look at a business's accounts payable turnover ratio as an indicator of their financial health and creditworthiness.

In summary, calculating accounts payable turnover is a valuable tool for businesses to manage their cash flow and financial health. By tracking this metric on a regular basis, businesses can identify areas for improvement and build strong relationships with their suppliers and vendors.

How Do You Calculate Accounts Payable Turnover in BQE CORE

BQE CORE itself isn’t naturally geared towards letting you calculate complex metrics like Accounts Payable Turnover. As an alternative, teams typically use products like Arithmix to import data from BQE CORE and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like BQE CORE, combine it with data from other systems, and create calculations like Accounts Payable Turnover.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Accounts Payable Turnover in Arithmix

Calculating metrics like Accounts Payable Turnover is simple in Arithmix. Once you've created your free account, you’ll be able to import your BQE CORE data, and use it to create natural language formulas for metrics like Accounts Payable Turnover.

Arithmix is designed to give you the power to build any calculations you want on top of your BQE CORE data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.