Every business operates under two-cycle i.e. Revenue Cycle and Expenditure Cycle. Accounts payable plays an important role in the purchasing and expenditure cycle. It consists of necessary accounting activities to complete the purchase once the order has been placed and the product or service received. It is necessary to keep the track of accounts payable, if the payment is done on a timely basis then the credibility of your business increases and it also reflects upon the goodwill of your business. We provide Accounts Payable Services by keeping the track record of all payments and expenditures, invoices, statements, etc. through our expert team.
What is the Accounts Payable Process?
It is the process that involves the purchase and payments department of the Company and to carry all necessary activities from placing an order from the supplier and making final payments to the supplier.
The Process involves:
|Receiving the Bill|
|Review the details|
|Updating the record once the bill is received|
|Make the payment timely.|
Why Accounts Payable Services is important?
The Company affects with the factor of Cash i.e. money that comes in and money that goes out. In the same manner, the money that goes out deals with the Accounts Payable. The Company needs to pay for various suppliers.
So for managing the cash management accounts payable service is important, below mentioned are the points:
- Save the Money: The good accounting practice is very essential which can help to save the money. By paying the creditors’ on time or before time early discounts can be availed and paying the money before time can also maintain a good relationship, trustworthiness, and an increase in goodwill.
- Maximize the profit: If the payment is scheduled systematically then it can help to maximize the profits of the Company. If the service has opted then penalties can be avoided and no duplicate payments can be made.
- Data Analysis: The Company should maintain the data which can help the company to understand the history of payment which can be used to identify the Company’s working and help to modify for making future payments.
- Identification of fraud: Accounts payable deals with the payment, while analyzing the discrepancy is detected made in the payment. This is the reason the Accounts Payable services can help to detect fraud or theft.
- Increases Efficiency: By outsourcing it enables the organization to offload the transaction to the service provider expertise and can concentrate on the core activities of the Company.
- Creating and implementing the better procedure: If the service is being outsourced it provides a better procedure for accounts payable. This will help in creating better relations with the supplier and to avoid the late payment.
Let’s Understand with Example
If there is a manufacturing Company who has purchased the goods from the supplier of Rs. 50,000, and the supplier has given the period to make the payment within 45 days from the date of billing. Now the amount of Rs. 50,000 is payable till the amount is paid.
- Accounts payable is created when the goods are bought on credit.
- If the Accounts payable is outstanding for a longer period it might create a negative impact on the business, if the time is specified by the supplier the payment should be made so the goodwill of the business is maintained.
- Accounts payable is considered as short term debt, hence it is shown under the head of “Current Liabilities” of the balance sheet.
In every business managing of cash is important, from one side the receivable should be received only then payables can be paid then it can help to avoid the cash crunch and blockage of capital in the business. To manage, the policy should be framed with the help of an expert team like ENTERSLICE so the flow of business remains constant and can help to grow the business in the future.
What are Accounts Payable Services?
The following are the services which can be provided by the Company like ENTERSLICE:
- Date entry analyst.
- Daily payment of an invoice
- To analyze, if any payment failure issues
- Maintain a supplier database
- To coordinate with the team that the invoice is processed accurately and timely.
- Timely payment before the due date.
- Expertise knowledge.
- Preparing the analyses of accounts and providing the monthly reports.
In every Organisation, accounts payable is important and it is must work out strategically. Due to various reasons, there should be a separate department of Accounts Payable so the track record can be maintained, avoid the duplications and the cash can be properly managed. Therefore it is advisable if the service has been outsourced the payment will be timely made, increase the efficiency, increase in goodwill, etc. To avail, the expertise service kindly contacts “ENTERSLICE.”