Paying bills isn’t something we often like to think about, but, it is a necessary function for even the smallest of businesses. In this post we’ll discuss are 2 ways to make the mundane task of accounts payable, a little less painful.
What is Accounts Payable?
Accounts Payable (AP) is an accounting entry in financial reports that show how much short-term debt is owed by your company to creditors or suppliers. You can find the sum of your business’s accounts payable on the balance sheet under the current liabilities section.
Your accounts payable report is there to keep track of who you owe money to, how much you owe and how long your debt has been outstanding. The best practice is to review your AP report on a monthly basis, at a minimum. The following are three tips you can use to get a handle on your business’s accounts payable balance.
1 – Negotiate With Suppliers
The stronger your relationships are with your suppliers, the better. If you are deemed creditworthy, you have the opportunity to negotiate payment terms and credit limits for each supplier you do business with. Better relationships with suppliers lead to more leeway when it comes time to pay, and a greater chance at receiving discounts and having successful negotiations regarding contract terms. Vendor relations should never be ignored as stronger relationships make the entire accounts payable process run smoother.
2 – Review Your Accounts Payable Report Regularly
Your accounts payable (AP) report is easily in the top 5 reports in which you should review each month. You always need to see if your business has any debts that are past 30 days. If so, you are most likely late and will be charged interest on your balance due.
Conclusion
Running a business is a complicated affair, but you can simplify your life and take back your calendar by outsourcing your accounting to Still Water Financial Operations. We have the knowledge, tools, and experience necessary to have your business running like a well-oiled machine.
The accounts payable function is a labor-sum task and is costing you more than you think. Find out how outsourcing your accounting work can help grow your business by contacting us today!