What is accounts payable

Guide to Accounts Payable

Accounts payable is the practice of managing payable obligations of an enterprise or entity. It is a critical business process, in which an amount is owed by the enterprise for supplied services. In simpler terms, an entity orders services or products and gets it before making prior payment.

This dealing is a recorded liability in the systems of accounts depending on the invoice amount. Accountability due to such suppliers or vendors is called accounts payable process. Once the liability or due amounts are paid by the entity, it is reduced from their accounts payable balance.

Importance of accounts payable

For the all-round functioning of any business entity, accounts payable and its management plays a vital role. Many benefits supporting this are,

1. It helps business entities to maintain their cash flow, by making payments only when it is due with a credit system.
2. Ensures a strong credit and business relation with the vendors and companies by taking responsibility for their payments.
3. Timely payments of invoices help in providing a systematic flow of business and accounting services.
4. It helps in eradicating, overdue, penalties, charges or late fees due to the overdue. It helps in maintaining an organized system of accounts enabling tracking of payments.
5. Frauds and thefts are avoided to better extents by the strict following stringent accounts payable process.

How automation of accounts payable process helps?

To save time, and have efficient accounts, payable process with automation updates is necessary. Moreover, automation immensely helps in reducing human errors and processing cost of invoices timely.

Many accounting software are successful in streamlining the accounts payable process for business. It eliminates the paper work accounting job that is strenuous. All the invoice payments are digitally generated that can be scanned, copied and emailed for approvals. This saves a lot of time, improving the performance of the business. Hence automation in accounts payable process is a clever move.

Accounts payable processing in Xero with receipt bank

A software that is successful in initiating amazing collaboration is receipt bank. It is an easy to use software that does not need any paperwork. This software is able to extract your accounts payable data and exports suitable accounting software. Some of its many advantages are,

1. Assemblage accounting services, by making records from invoices even if payments are due for less confusion.
2. Cash management to help during the budget formation periods.
3. Features of automated entries and import of data within time, to ensure accuracy in cash-flow in the business.
4. Provides over-view for payments and monetary investments, so you can easily forecast future requirements of business transactions.

Conclusion

Accounts payable process is an easy system, which is vital for the intimate cash involvement of every company. High-end business corporation which work along daily monetary investments adopts this system, to maintain accounts and track their dues.

Ensuring a strong credit and long-term relation with the vendors and companies it is a trustable system. Hence, it is the most safe, facile and equipped method of managing payable obligations without hassle.