What is the official business definition of Accounts Payable Problems And Solutions?
- Accounts payable are the financial obligations incurred by a business to its suppliers and vendors for goods, services and other items purchased on credit from them. These accounts are often referred to as trade or vendor accounts. They are created by action of the company purchasing the items and become a liability of the company until paid.
- When an account payable is due for payment, it is considered overdue. This may cause penalties or fees to be assessed against the company to which the payment is owed, so it’s important to remain current with your accounts payable payments.
- When you have a large number of accounts payable that are overdue, this can be described as an accounts payable problem. In order to correct these problems you should perform a review of your accounts payable process to identify where things are going wrong and what steps you could take to better streamline your process. This will result in fewer late payments, penalties and fees being assessed against your company and power you toward becoming more profitable.