Accounts Payable Processing
Accounts payable processing is more than just paying bills:
- Purchase order(A purchase orderis a legally binding document between a supplier and a buyer. It details the items the buyer agrees to purchase at a certain price point. Purchase order computer systems have made the purchasing process more efficient and allow for better inventory and payment tracking). This is also known as a voucher.
- Receiving goods which acknowledges receipt of items for which a purchase order has been created. It also makes certain that everything that was ordered has been received and that nothing that was not ordered has been received. This is a validation step before invoices can be approved.
- Invoicing – this is where the invoice that the vendor has generated and sent to you is entered into your accounting system. This is done after the purchase order has been generated and the receipt of items ordered has occurred. This is also where the invoice is turned into an item to be paid and recognizes the appropriate expenses and jobs or projects to which those expenses are assigned.
- Monitoring the aging of invoices – Sometimes it is prudent that payment of invoices is delayed in order to maximize the cash flow of your organization. However, there is a risk that invoices would not be paid in a timely fashion or within the agreed upon time frames. This monitoring assures compliance with the agreed upon terms.
- Issuing remittance or payment against the invoices. Payment can be by check which would probably require your signature on the check, or by direct debit (a method by which you have agreed with the vendor to automatically withdraw the amount of the invoice from your account at your bank),or by credit card, or by online payment ( this is where the vendor has developed a website payment option which will allow you the option to control when the vendor will direct debit your bank account. All of this will still need your approval to pay.
- 1099 reporting -The IRS requires that you report payments that meet a certain set of rules, chief among them is aggregate payments that exceed $600 in a calendar year. In order to comply with that requirement, you must get certain information from your vendor, or prove that you made credible attempts to get that information. This is documented by issuing a W2 form (an IRS form that requests the required information such as legal name, character of the organization, tax id and address.
We can provide these services for you the old-fashioned way by handling all of the “paperwork”, or electronic versions or the paperwork, or we can use our Bill Payment platform.
We have an online platform that will allow you to decide what bills to pay and when to pay them. This platform allows for access anywhere, anytime from your pc, laptop, tablet, or smart phone and:
- Will auto-enter the invoice data so that you can review the data so that you can decide whether the invoice is valid and in accordance with what you and the vendor agreed upon.
- Will automatically route the bill to the appropriate person(s) for approval.
- Will automatically synchronize (sync) with most accounting software. This is important because it eliminates the need to make any additional entries in order to have your accounting records be up to date and accurate.
- Is able to make payments by Automated Clearing House (ACH), an industry standard for electronic payments, virtual card (a randomly-generated cardnumber associated with your actual credit card. Depending on the issuer, you may be able to set a maximum charge for the virtual number, further protecting your transaction. And typically, you can set it to expire in anywhere up to a year from its creation date), international wires (if you have vendors in foreign countries and with no wire transfer fees), and finally by the old fashioned but tried and true paper check.
- Will provide a full voucher and/or remittance
- Allows for multiple user roles, permissions, and security (this means that you can set someone up to have as little or as much access to your bill payment system as you feel comfortable with).
- Allow online access to all cleared checks(which is useful if there is some dispute over whether a bill has been paid).
- Allows for unlimited online document storage (which is useful for documentation of expenses for tax and audit purposes).