Accounts Payable | Introduction
It doesn’t matter what type of business you run, paying bills is almost certain to be a core component of what you do. You have to keep the business running and that almost certainly means paying out 3rd parties and vendors and clients. People don’t work for free. That’s why accounts payable is so incredibly important to a small business.
Many small businesses decide to go this road on their lonesome. Like so many startups, everyone wants to save money and the easiest way to save money initially is to just do as much as you can yourself. I’ll admit, this has been the story of my life. However, times do change. Your business grows. And after a while, it might make less sense to do it all yourself.
Paying off short-term debts in a timely fashion is key to running a professional business. Paying suppliers and paying creditors timely and professionally is what keeps your business trucking along.
This is when you might consider a 3rd party accounts payable service. In the end, doing it all yourself is a headache and it may take away from you carrying out more productive duties. Your company is going to grow in slower fashion if you are bogged down paying vendors and constantly worrying if you payout methods are secure.
Accounts Payable Job Description
The job of the accounts payable department is to essentially make sure all vendors and recurring bills are paid. Your company’s reputation is at stake when it comes to your reliability in paying on time. Vendors who don’t get paid often end up pulling their services or working less hard. You always want to make sure your accounts payable department is in strict adherence to a high ethical ground.
In the end, the job of accounts payable is to be a timely payout machine. Organization and professionalism are at the top of the list in terms of what small businesses look for from an employee. If you are unorganized or don’t have some education in accounting, this isn’t likely to be your area.
Accounts Payable | Check Fraud
For any accounts payable department worth their weight in salt, preventing check fraud is a priority. Check fraud remains one of the more lucrative ventures for criminals looking to fleece the system. If your business checks aren’t secure, you are putting at risk your business’ finances. Too many small businesses think that check fraud is a thing of the past, but this ancient art is thriving more today than it ever has.
This is because people still use checks. It is a myth to believe that checks are the way of dinosaurs. Checks remain a highly convenient and secure way to transfer money. But no different than using a credit or debit card, if that check is handled or printed in an insecure manner, it becomes a liability.
Criminals prey on those who don’t use secure checks. Check fraud is similar to street crime, the criminals will almost always target the weakest links. If your checks are tight and secure, you aren’t likely to be the victim of this criminal activity. There are too many easier targets that criminals will go after. Criminals want easy street, not complex matters.
Accounts Payable vs. Accounts Receivable
Accounts receivable is the portion of the company that takes in payments that are owed to the company, as opposed to paying out vendors owed by the company.
In the end, accounts payable should be looked at with the exact same seriousness every other department is looked at with. Unfortunately, too many small businesses simply don’t see accounts payable as a wing of the company that can contribute to profits, so they tend to overlook its impact. All highly successful companies run a tight ship when it comes to accounts payable. I can tell you that speaking from experience, you want that portion of your business to be as professional and secure as possible.