Arranging accounts payable management and record keeping
Accounts payable management is part of your administration. It gives you an overview of which customers or suppliers you need to pay for services or products delivered. Read about the steps you can take to keep your accounts payable management in order.
6 tips for smart accounts payable management
1. Make clear arrangements with suppliers
Make clear agreements about quality, pricing, delivery times, and payment terms. Keep notes of what has been agreed in your accounts payable records. Also try to improve the purchasing conditions of ongoing contracts. While you cannot force any vendor to make changes, you can always ask or negotiate. Also pay attention to expiring agreements. That way you can be sure to start negotiations with new or current vendors in time.
2. Check invoices for compliance
See if incoming invoices meet the legal invoice requirements. Invoices are required by law to contain information such as the VAT number and the date, for example.
3. Keep records and check them
- Give each invoice you enter into your system a number, such as the invoice number or your own unique invoice number.
- Store all invoices in the same manner in your digital or paper financial records. This makes it easier to find paperwork when you need it.
- Check each invoice to ensure that the goods or services delivered are correct. Compare quantities and prices with the price quotation or order, and check that the total price is correct. Return any incorrect invoices with an explanation.
- Keep a copy, your written response, and all other correspondence relating to that invoice.
4. Payment
Pay invoices within the statutory payment term. If you do not have enough cash in hand to pay all your accounts payable before the payment deadlines pass, contact your suppliers. Ask if you can come up with a payment plan, such as paying in instalments.
5. Leverage your supplier credit
Some suppliers offer credit. This means they will deliver goods or services and allow you to pay later. From the time the goods or services are delivered until the moment you pay, you will have credit. You can use the unpaid amount for other expenses. Please note: always pay within the agreed and statutory payment term. This prevents extra costs and future supply problems.
6. Get smart about inventory management
Tailor your inventory to market needs. The shorter you keep products in stock, the sooner you will be paid for them. A digital inventory system will provide a clear overview.
Keeping records: do it yourself or outsource?
Keeping business records is required by law. That is another reason why it is important to get your accounts payable and receivable management in order. It also allows you to track if your customers are paying on time. A clear overview will also help you pay incoming invoices on time.
Advantages of outsourcing your record-keeping duties:
- Focus on running your business instead of administration.
- With a bookkeeper or accountant, you have an expert for administration
- In the long run, this can save you money, for example, with tax benefits
Video – Boosting your financial insights: 6 tips
This KVK video shares 6 tips to boost your financial insights and can be viewed with English subtitles.