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Payable Analysis BI

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Payable Analysis BI

Payable Analysis in Business Intelligence (BI) focuses on examining and optimizing a company’s accounts payable (AP) processes. It involves using BI tools to analyze data related to outstanding invoices, payment terms, supplier performance, and cash flow management. The goal is to improve financial efficiency, ensure timely payments, and maintain healthy relationships with suppliers while also optimizing working capital.

Key aspects of Payable Analysis BI include:

  1. Aging Analysis: Assessing the age of outstanding payables to identify overdue invoices, prioritize payments, and avoid late fees or penalties.
  2. Cash Flow Optimization: Monitoring the timing of payables to manage cash flow effectively, ensuring that payments are made strategically to balance liquidity and supplier relationships.
  3. Payment Terms Compliance: Analyzing whether the company is adhering to agreed-upon payment terms with suppliers and identifying opportunities to negotiate better terms for discounts or extended payment periods.
  4. Supplier Performance: Evaluating supplier reliability in terms of pricing, quality, delivery times, and payment terms to optimize supplier selection and negotiate better agreements.
  5. Discount Utilization: Tracking early payment discounts or other offers from suppliers to ensure that the company takes full advantage of cost-saving opportunities.
  6. Expense Control: Identifying patterns or discrepancies in payables, such as duplicate payments, unapproved invoices, or unnecessary spending, to reduce costs and improve financial controls.
  7. Forecasting & Budgeting: Predicting future payables and aligning them with cash flow forecasts and budgets to ensure the company can meet its financial obligations without impacting operations.

Payable Analysis BI Designed to Answer Bellow Questions

  • How can we efficiently control current liabilities and calibrate cash management?
  • What substantial part of payments are overdue?
  • What is their composition by age (bucket analysis) and who are the Top 10 vendors in each age category?
  • Who are the Top 5 Vendor’s by spend? Can we maximize cash flow by renegotiating their terms of payments?
  • What % of my purchases are on credit?
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