How To Calculate Accounts Payable Turnover in Quickbooks Desktop Enterprise | Arithmix

Calculating accounts payable turnover is an important aspect of managing your business finances. It helps you understand how quickly you are paying off your debts to suppliers and vendors. This information can be used to make informed decisions about your cash flow and financial health. While Quickbooks Desktop Enterprise offers a convenient way to track your accounts payable, you can calculate your accounts payable turnover manually using some simple formulas.

What Is Accounts Payable Turnover?

Accounts payable turnover is a financial ratio that measures how quickly a company pays off its suppliers and vendors. It is calculated by dividing the total amount of purchases made on credit by the average accounts payable balance during a specific period. The result is the number of times a company pays off its accounts payable in a year. A high accounts payable turnover indicates that a company is paying off its debts quickly, while a low turnover suggests that a company is taking longer to pay off its debts.

For example, if a company has $100,000 in credit purchases and an average accounts payable balance of $20,000, the accounts payable turnover would be 5. This means that the company pays off its accounts payable five times a year.

When Is It Valuable To Calculate Accounts Payable Turnover?

Calculating accounts payable turnover is valuable for businesses of all sizes. It can help you understand your financial health and cash flow. A high accounts payable turnover indicates that you are paying off your debts quickly, which can improve your credit score and reputation with suppliers and vendors. A low accounts payable turnover may indicate that you are struggling to pay off your debts, which can lead to late fees, interest charges, and damage to your credit score.

Calculating accounts payable turnover can also help you identify areas for improvement in your business. For example, if you have a low accounts payable turnover, you may need to negotiate better payment terms with your suppliers or vendors. Alternatively, you may need to improve your cash flow by increasing sales or reducing expenses.

In conclusion, calculating accounts payable turnover is an important aspect of managing your business finances. It can help you understand your financial health and cash flow, and identify areas for improvement. While Quickbooks Desktop Enterprise offers a convenient way to track your accounts payable, you can calculate your accounts payable turnover manually using some simple formulas.

How Do You Calculate Accounts Payable Turnover in Quickbooks Desktop Enterprise

Quickbooks Desktop Enterprise 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 Quickbooks Desktop Enterprise 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 Quickbooks Desktop Enterprise, 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 Quickbooks Desktop Enterprise 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 Quickbooks Desktop Enterprise 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.