Managing account payables is an important best practice which affects business matters in two ways. It can affect the cash flow, and at the same time have an impact on relationships with the suppliers. Therefore it is imperative that businesses employ best practices for managing accounts payable processing.
Best practices in managing accounts payable affect cash flow positively. A company with smooth operational systems for accounts payable saves money. This is because they process invoices with a minimum staff strength and therefore have low cost of materials. For example, if a firm reduces its processing cost from $3.55 to $0.35 for 12,500 involves it can save as much as $40,000 per account payable for its employees.
With regards to supplier relations, accounts payable has a huge impact on establishing trust between the suppliers and buyers. Paying bills upon receiving goods and within the agreed upon time is a best practice. It strengthens the relationship and creates trust and builds good and lasting cooperative associations. This is important because suppliers provide valuable trade credits. They also provide new methods and information about products. These play a significant role in establishing a smooth and impressive customer service which is an essential best practice.
Keep the Cash Flow Steady
Effectively managing the cash flow is an unavoidable best practice for success of any organization. Your approach to management of the capital is the cornerstone for success. There are some best practices which must be introduced into the system to ensure a steady cash flow. These are;
These are recommended best practices required by organizations managing the accounts payable.