A major part of any business’s bookkeeping is monitoring cash flow in and out. Accounts payable refers to the money owed by the company to vendors, taxes, rent, loans, and monthly operational bills. Below are a few reasons why it is vital for companies to keep track of this area.

Why Is Accounts Payable Important?

Accounts payable refers to what your company owes, whether that is in regular bills, rent, or debtors. Along with accounts receivable, it makes up your business’s bookkeeping and accounting, which gives you an overall financial picture to track money flowing in and out.

Overdue and unpaid bills can be detrimental to a company, especially a small business. When accounts payable is not monitored, your company can suffer a huge impact on its credit standing, and as time passes, you may not be able to run it efficiently because there is too much outstanding debt that has been left to grow.

What Does Accounts Payable Management Entail? 

Planning your accounts payable process is the first step. Creditors should always be tackled first, especially if interest will accumulate and make your initial debt even larger. When money comes into your company, set bills for their due date, and avoid late fees, accrued interest, and other charges.

Another important step is tracking your company’s ups and downs in cash flow. This requires analyzing your busy season versus downtime, where cash flow is not as strong. By keeping up on trends, you will be able to plot out your accounts payable more efficiently and avoid getting caught without cash to cover all your bills. This also means knowing your payout schedule since not every bill will be due at the same time. You should know when payroll, taxes, rent, and other payments will have to be sent out.

For many businesses, particularly smaller or new entities, accounts payable can be complicated and overwhelming. That is where outsourcing to a bookkeeping or accounting specialist can be incredibly beneficial. Not only can experts in cash flow management help you schedule out your accounts payable, but they can also show you how to get a better handle on your company’s important but complicated financial transactions.
 

For bookkeeping and business management services, Beacon Virtual Assistants LLC is there. This support company located in St. Charles, MO, offers everything from data entry to database management to help you streamline your business processes. Their virtual assistant offerings even help you organize your daily agenda. Call (314) 650-9784 or visit them online for more information.