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Account Payable (P2P)

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Overview

Accounts payable is usually a short-term debt payment that needs to be paid to avoid being a defaulter. It is treated as a liability as a company purchases goods on credit and needs to pay it back. Account payable is not limited to the companies only. Even individuals can also have an account payable. Many people buy any item or service where the bill is generated at the end of the month. It means that you have to pay it on a certain date. This also becomes an account payable. However, controlling of account payable is a tedious task. Accounts section needs to be cautious while preparing transactions linked to Accounts payable. It is something that can have an impeccable impact on your organisation’s position. Organisation face many problems related to the processing of accounts payable. 

Seven major problems faced by the organisations for accounts payable are:

1) Increasing complains about delayed vendor payment.

2) Behavioral change to the vendors while making payment.

3) Making error while deducting TDS on vendor payments that leads to penalty.

4) No access to the real-time report of pending bills.

5) No visibility towards the pending bills that are yet to be posted in the software.

6) Incorrect provisioning that leads to incorrect profitability.

7) Makin double payments to the vendors.

Monitering of Account payable will help you eliminate all these problems. It is an all-in-one solution to all these above problems. 

Scope of service

Accounts payable offers you various scopes to enhance your business and increase profitability. From thousands of scopes, here are some notable ones.

1) Monitoring documents that you receive in multiple parameters.

2) Correction or the deduction of TDS, work contracts and many more.

3) Bill wise documentation of the debts in the accounting software with all provided information.

4) Profit or cost-wise documentation of expenses.

5) Automatic processing of all the bills of payment as per credit period recorded.

6) Complete access and generation of all the reports.

7) Balances internal control with employee checks.

8) Contractual payment of tax and taxation compliance.

9) Update on any information related to accounts payable.

10) Tracking the validity of all the agreements.

11) Creating audit schedules and other required details.

Reports related to accounts payable

Accounts payables also involve various reports that need regular monitoring. Most of these reports within an account payable are usually for tracking the total expenditure of a company.it also helps you know any specific payments within the departments. Any business can use these account payable reports to verify their bill of payment. These reports include:

1) Reports about the pending bills and reason behind the delay.

2) Provisioning reports to make and reverse provisions.

3) Aging schedule.

4) Bill-wise pending report of vendors.

5) Report about the expiry of agreements of the vendors.

6) Payment history report that helps you track all the transactions made to vendors.

7) Reconciliation report that shows you all the accounting activities related issued payments.

8) Voucher activity report that offers you all the details on payment vouchers made over a specific time.

9) Invoice aging report that offers you a list of all the unpaid account payable invoices, including the ones that are due for payment.

10) Trial balance report that assists you to catch all the vendor payments and their error.

Advantages

Accounting in every business needs accuracy, or else it can have a major impact on your business. Account payable helps you maintain that accuracy. Here are amazing perks of utilizing accounts payable.

1) Maintaining complete fairness while making any payment as per SLA’s.

2) Real-time access to the payments that are pending, resulting in better communication between accounts and user departments.

3) Complete accuracy in accounting that leads to profitability.

4) Full advantage to applicable tax credits.

5) On-time preparation of financial MIS that completely depends on Accounts payable.

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