Organizing your business’s accounts payable is crucial in running a successful business. Losing track and making costly mistakes can be easy without a structured system. Late payments, missed invoices, and strained relationships with vendors are just a few of the potential risks of not having your accounts payable in order. Learn more about accounts payable, how to keep them organized, why it’s essential, and how to get expert help.
What Are Accounts Payable?
In simple terms, accounts payable (AP) is essentially money leaving your business account or bills for your business. It’s a combination of services your company owes money for, such as equipment, materials, leasing, licensing, transportation, etc., to its suppliers purchased on credit. The payments are billed to another vendor who charges your business for the service.
Why is it Important?
Just as it is crucial to keep your personal financials in order, there are many reasons why it is so important to keep your business’s accounts payable organized:
- It helps you to avoid being overcharged or undercharged
- It helps you to avoid missing a payment or making a late payment
- It keeps your business relationship strong amongst your vendors
- It creates a clearer understanding of your business’s financial situation
- It creates good cash flow amongst your business without disruptions in invoice payments
How to Stay Organized
So, you have decided it’s time you get your account payable in order. What next? Follow some of these simple tips and tricks to help keep your accounts payable organized:
- Create a system that works for you — create a system for recording and filing invoices that makes sense for you and is easy to remember and follow each time.
- Check invoice amounts — check and verify invoices before approving the payments to avoid overcharging or undercharging.
- Separate tasks — separating the functions of accounts payable into different days of the week or delegating them to various staff members can be a great way to stay organized.
- Run reports — it is always a reasonable precaution to run regular reports to monitor data and review your accounts payable to ensure everything looks accurate and up to date.
Get Help with Your Accounts Payable
If you’re a business owner, it’s okay to feel overwhelmed when learning about AP or trying to find a suitable method of staying organized. All About Businesses is here to help you succeed! Our bookkeepers are experts in various industries and have a wide variety of skills, including accounting, bookkeeping, accounts receivable, payroll, tax preparation, and more! We will ensure your business’s bills are paid on time, and your financials are organized. Contact us to get started today!
