Accounts Payable (AP) is a critical part of any business’ financial operations. It is the process of examining, recording and paying invoices received from suppliers or vendors. Without a proper AP system, businesses risk spending too much money on late payments, running out of cash due to over-extended payment schedules, and losing track of important supplier information.
By implementing an effective AP system, businesses can ensure that they are in control of their finances while still maintaining strong relationships with their vendors. The key elements of an AP system include tracking accounts payable balances, establishing listing protocols for incoming invoices, setting up processes for processing payment requests, and coordinating payment with vendors. These elements will help any business maintain accuracy in its books, avoid costly disputes, and increase vendor loyalty.