The health of any accounting firm depends upon its finances. Do you agree with this? If you’re able to manage finances, you will secure your business health in future as well. And this happens through accounts payable which is a part of accounting services in New York. If you’re into accounting firm, you should know about the process of accounts payable.
If your company isn’t able to manage payments of different people or clients, then you must understand the accounts payable process. That’s the reason I have brought this article to you.
Here I will be talking about accounts payable process. To save your business finances, make sure to read this article till the end.
Without further ado, let’s talk about it.
What account payable (AP) is?
Simply putting, the accounting entry of goods and services is called accounts payable where a company pay vendor or supplier for delivering goods or services. Accounts payable is appeared under credit liabilities on a balance sheet. So, in your company, AP department will be responsible for making payments owned by the company to suppliers and other creditors.
Additionally, accounts payable refers to the short-term debt, which means you have to pay them within the year. Since AP is the liability of the company, you have to manage it effectively and responsibly. You can also hire accounting services in Austin for better performance in the future.
Let’s now understand the steps involved in accounts payable process.
Steps involved in the process of accounts payable
Below I’m going to talk about the process involved accounts payable. Make sure to read each and every step involved in it for better understanding. But let me tell you that the accounts payable process usually has 4 steps, which may vary from company to company. So, let’s start and talk about them:
1. Receiving the bill/invoice
In the first step, the company receives the bill or invoice you can say if the goods were purchased. The bill actually helps you track the quantity of what you received.
2. Reviewing the bill/invoice details
Once you receive the bill, in the next step, you have to check and review the bill thoroughly. Make sure the bill includes vendor name, date and verified, authorization, and matching requirement of the purchasing order.
3. Approving or updating the invoice
In the third step, you have to update the ledger account on the basis of received bills. Here expense entry is usually required. For that managerial approval is required.
4. Making timely payments to supplier or vendor
This is the final step of the accounts payable process. As you can read you have to make timely payments to all the supplier or vendors. Make sure all the required documents are fully prepared and verified. Every detail entered on cheque, vendor bank account details, original bill, and purchase order, everything you have to examine.
This is the complete process involved in accounts payable. I hope it’s clear to you. Let’s move further and talk about to prevent the company’s cash and assets.
How do you secure the company’s cash and assets?
This is very important question to know. To make sure your company’s cash and assets are safe and secure, your accounts payable process should have internal control which includes:
- – Stop paying a fraudulent invoice
- – Don’t pay an inaccurate invoice
- – Prevent paying twice invoice to a vendor
- – Make sure that all the vendor invoices are accounted for
These are some of the tips which you must consider to prevent your asset and cash of the company.
What all things should be there in accounts payable?
Accounts payable of every bookkeeping service company in new york should have current liability, collection of short term credits for goods and services received by a company. Additionally, an AP department of should also take care of internal payments for business expenses, travel and petty cash.
The final words
Accounts payable is one of the most significant and crucial parts of your business. In this article, you have learned about accounts payable that the process involved. I hope you have learned the article thoroughly and understood the concept of it. Make sure you also follow and implement the process so that you are able to save your company’s asset and secure accounting. This way you will also able to secure your business finances in more effective way.
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