It is a headache for business owners to pay the bill on time. A business owner has a lot of duties, and paying the bills in time is one of them. Though it sounds like an easy task, in reality, it can be a bit tricky as various bills need to be paid every month. It is prevalent with other business-related stress to forget to pay the bill on time. Not paying bills timely cost more interest and sometimes their reputation. So to avoid such a situation, it is crucial to set up an account payable. An account payable system will pay your bill automatically on time. But setting up can be a bit difficult. So here are seven easy steps to set up an account payable system:
- Selecting a Software: So before setting up an account payable software, you will need a business bank account; after that, you will have to choose a software that you are comfortable using. There are various softwares with AP automation for you to choose from; some offer early payment discounts. For the first time, you should not choose anything too complicated. Any online finance program or spreadsheet will be enough.
- Setting up the Software: For this part, either you can hire a professional to do this for you, or you can do it yourself. You have to link the business bank account with the software. You have to enter the names, addresses and payment mode. If you have employees filing for expenses, you would want to keep everything in the book. It reduces fraud when every other employee purchases things on the office credit card linked to the software.
- Inserting Invoices in the System: You have to enter the details of whoever owes you money for business purposes. After that, you have to enter the invoice with the date; it would help you keep in mind when you need to pay. You can also enter other details, like why and when you need to pay. Listing your expenses will give you a general idea about the cost you are bearing to keep the business floating and how much profit you are making.
- Approving the Invoices: You can either do it yourself or hire a manager who can approve invoices for you. If you do not approve a specific purchase, you can notify the employees about it; you can disapprove it. You can place an AI automated system with the software to inform you about purchases that are not business-related.
- Scheduling the payment: Maintaining a good relationship with the vendors is vital. You should make all the payments within the limited time frame. The standard time frame to settle the cost is 30 days, but you can schedule the pay that suits you and the vendor better. You would want to print out all the invoices and recheck them before planning the payment.
- Do a test run: Before actually using the software for business, you should do a test run. If you make the payments offline, you should calculate the amount you need to pay beforehand and write the checks. If you pay online through either online banking or UPI, you should calculate the amount and keep that much money in the account so that your payment won’t get stuck. If you plan to use a credit card for payment, then paying off credit card debt timely is also necessary. Some software supports payment automation.
- Making the payment timely: Making payments timely is vital; if you are paying through check and have a lot of bills to pay, then checking if you have enough checks left is also your duty. The person in charge of paying the bills should not lag as being behind the bill won’t be good for your business’s reputation.
It is necessary to recognize that if you are new to the business or it’s a start-up, you might inevitably be behind the bills. Still, an account payable system will help you do budgeting. It will be easy for you to decide if you understand your finance well.
There are various systems out there, but there is no best account payable software as every software is different from others, and you have to choose according to your convenience. Account payable software for large business is different than for small businesses. There are account payable systems for banks that are developed specifically for them. Choosing a suitable Account payable software solution can make your life a lot easier.
WHY YOUR BUSINESS NEED ACCOUNT PAYABLE SOFTWARE
Managing accounts and paying the account payable is an integral part of a Business. Whether a business corporation or a public sector bank managing their books is essential to profit. Account payable is an amount that a corporate or entity owes to its suppliers or vendors. The vendors or suppliers supply goods and services to the Business, making final goods. After delivering the goods, the business owner’s liability is to pay the vendors or suppliers. Not giving money to vendors timely is awful for a business’s reputation. So to combat such an issue, you can switch to an account payable system from your regular payment ledger. Account payable Software keeps accurate books and helps reduce fraud.
- To Maintain a Good Relationship with the supplier: Once a vendor supplies you the goods or provide you with the service you need, it becomes your liability to pay for the service you receive. If you don’t pay on time, it can cause your relationship with the supplier. For businesses, having a good reputation is essential for growth. So if you don’t want to be behind the bills, you should switch to the account payable system soon.
- To keep accurate Books: Many businesses fail because you can’t keep a correct account book. To understand how much profit you are making, you need to know how much you invest.
- Safeguards you from fraud: If your Business is growing, many things need your attention. You cannot always keep updating the ledger. But if you hire someone, there’s a chance that the person might use phoney receipts to get money out of you. An account payable system safeguards you from such a situation; you can check all the data yourself in one place.
- Saves your Time: The account payable system saves a lot of your time. Some of these Software’s have AI automated, it generates an invoice on its own, and you can pay off your liability just by approving it.
- Help your Business grow: With the help of Accounts payable Software, you get the accurate number of your spending and profit. With that, you can come up with future strategies for your Business. And also cut down on unnecessary purchases.
- Convenient for Business: AP automation is very suitable for businesses of any scale. It keeps everything in one place, the finance look a lot more organized, which helps run Business in the long term.
Various companies make account payment solutions or Software in the market. Whether you want to pay online or offline, there is a variety of Software to choose. Account payable Software for large Business is different from Software used by small businesses. There is no best account payable Software, and you have to select the Software according to your convenience. There is some account payable Software for banks to use; those are different from what the businesses operate. Many big enterprises also include departments to deal with account payable these are called account payable organizations. Their primary work is to clear out bills and detect any errors in the books.