Top 9 Accounts Payable Best Practices for Your Business

You can ensure your business' growth by monitoring its cash flow. Ignoring installing or reevaluating standard processes or tracking accounts payable can land you in trouble. Read on the best practices for your business' accounts payable process.

Accounts Payable: 9 Best Practices for Your Business

1. Prioritise Your Invoices

Schedule the payment of your invoices as per the credit period available to you. First, pay the one with a shorter period. Avoid putting pressure on your pockets.

You should also prioritise your credit card bills. First, pay the ones with higher interest rates. Then, streamline the others.

2. Know Your Cash Flow

Business' cash flow fluctuates, and you need to track it diligently. To improve your Accounts Payable (AP),

• Track due invoices
• Analyse cash flow
• Eliminate fraud
• Streamline AP process

3. Install Internal Processes and Controls

Internal controls and processes can help prevent fraud. In addition, the division of accounts payable work and multiple sets of eyes also help. Aim for improving effectiveness and avoid late fees and mistakes.

4. Separate Billing, Payment, & Check Processing

To reduce internal fraud, divide the AP process, and let different employees handle invoicing, check writing, and approvals. Do not trust the process to one person.

5. Duplicate Payments

In manual AP processing, you need to keep a careful eye on the AP process, as duplicate payments can leak money. Use accounting software and automate the process, and reduce such incidences.

6. Invoice Disputes and Resolutions

Any break in invoice payments can disrupt your cash flow. It can cause you to lose money. Try to find payment discrepancies. It gives you more understanding of your cash flow and vendors.

7. Automate Using Accounting Software

Paper-pencil accounting or manual accounting is a thing of the past. Know your business needs and invest in the right accounting software.

8. Track Checks

Track the checks that you have given to vendors. See if they were cashed and follow up on undeposited checks.

9. Reconcile Accounts

Experts advise reconciling accounts daily. You should at least do it weekly. Not doing so is terrible accounting and can hurt your cash flow.

In short, tracking AP is an endless task. The more you know about it, the better control you have over your cash flow. Hiring accounts payable service can help you take care of it efficiently.