Why Your Small Business Needs Accounts Payable

Paying vendors in a timely manner, tracking credit memos, finding discounts thanks to paying vendors faster – these are all tasks handled by accounts payable. Outsourcing your accounts payable allows for an innovative system to handle and track your accounts payable division in your business without investing in-house.

Accounts payable goes beyond keeping track of when payments are due, it also covers contractor reporting, tracking vendors for discounts, and more. 

What is Accounts Payable?

Accounts payable (AP)  is the business’s short-term liabilities. Accounts payable is the department in accounting that handles money owed to vendors, suppliers, and other creditors. AP is represented on the balance sheet when tracking reports aka outstanding amounts owed to vendors/creditors are shown as accounts payable balance. Increase or decrease in total accounts payable from prior periods are typically represented in the cash flow statement. 

What Does Accounts Payable Help With?

The following tasks are all things that AP can assist with to ensure your accounting department and business are running smoothly:

• Being unable to pay vendors or contractors on-time. 
• Not having enough time to do it all. 
• Missing out on opportunities to take advantage of vendor discounts.
• Being unclear as to their cash position and afraid to send money they don’t have.
• Being unsure how to or even where to begin to build a system that works.
• Not having time to research all the available options.
• Having boxes of receipts and invoices.
• Feeling afraid to ask for help not knowing what it would be like to work with someone on this.

Why is Accounts Payable Necessary for Businesses?

Your accounts payable department is responsible for accurately tracking, reporting, and ensuring that payments are approved and delivered in a timely manner. Accurate accounts payable reporting ensures that you have an accurate balance sheet. 

AP departments help your business foster good relationships with vendors to boost favorable payment terms, maintain accurate books for cash flow forecasts, and help your accounting department prevent mistakes and fraud.

How Do Businesses Implement Efficient Accounts Payable System?

An efficient accounts payable system stems from an efficient accounting system. With ModVentures, we offer both outsourcing an accounts payable position to outsourcing your entire accounting division.

An efficient accounts payable system can be implemented by creating a customized process that is specific to you and your business. These systems include uploading bills, communicating with accounts payable, reviewing and approving bills, and syncing your accounting systems. If you are ready to modernize your accounts payable, connect with ModVentures today