Best Accounts Payable Management Procedures

Accounts payable is one of the important processes in the accounting of every business. The amount you owe for purchasing the goods or services is updated in the accounts payable balance. The accounting activities of accounts payable are very vital when the order is made by the customers and payment of the due amount is to be made at the proper date. Account payable helps to give the ability to pay the debts on the business before the due date. The processing here needs to be faster so that all the invoices and the bills in the businesses are made clear sooner. Late payments are a big burden for any business which leads to a lot of problems in the accounting calculations further. For ensuring the proper working of the accounting department, the accounts payable management procedure should work very efficiently.

Here, we will look at some of the generalized accounts payable management procedures in the business:

1. Purchase order completion

The items for purchasing are set properly along with their respective prices. The timelines for the delivery are made properly, the terms & conditions to are list down in an ordered manner. A proper record of the purchase done is kept in the proper place in the accounting books.

2. Approval of the Invoice

Proper checking of the Invoice for the due amount of payment is made. In many organizations, the proper approval of the concerned authority is ensured before making the payments. All the details of the Invoice along with the proper name of the party are check-in a proper way.d

3. Receiving report processing

The goods or services provided records are scrutinized properly by the suppliers. The amount of the suppliers is checked in a proper way along with minor details. The report processing process must be faster to ensure that the overall payment is fast.

4. Recording the bill details

Once the receipt of the bill for which the payment needs to be made, the proper details about it are made entry. Here, the ledger account is updated with proper entries which get reflected in the proper accounting books. The details of the bills help further in sorting out any of the issues related to improper payments.

5. Processing the supplier Invoice

The processing of the payment is made once the invoice is received. Checking the details about goods or services which were actually used by the business is made.

6. Reviewing and processing the payment

Whether you are using the manual or software accounting, you must review the pending invoice each week regularly. These entire invoices must be immediately processed to ensure that all the vendors are getting their payments on time.

7. Repeat all the procedure weekly or bi-weekly

You can avoid the load at the end of the month for the payments, by repeating this process on a regular basis. Depending on the nature of the business you can make this repetition of the process either a weekly or bi-weekly basis.

These are some of the general procedures followed in the accounts payable management procedures. Proper implementation of the account payable management procedure will ensure that you pay all the payments on time, foster the vendor/customer relation, and make sure that cash outflow is accounted for properly.