Accounts Payable Description
Companies and businesses have huge transactions pertaining to their accounts payable process. They receive goods and services from various suppliers and they need to manage timely payments to these creditors to avoid default and adhere to the payment terms.
Accounts Payable Description
“Accounts Payable” is used as a generic term to represent various different things related to AP process. Some of the common usage of the term is:
Accounting Entry: As explained before “Accounts Payable” refers to the accounting entry that indicates a short term liability payable to the supplier of goods and services for the goods supplied or services rendered. It is a short term liability and categorized as Current Liabilities under the balance sheet head “Liabilities”.
Accounts Payable Sub Ledger: Companies and businesses have huge transactions pertaining to their accounts payable process. They receive goods and services from various suppliers and they need to manage timely payments to these creditors to avoid default and adhere to the payment terms. They use a subsidiary ledger generally referred to as “Accounts Payable Sub Ledger” and sometimes just as “Accounts Payable”.
Accounts Payable Process: Accounts Payable term is also used to refer to the accounts payable process. This process involves receiving the goods or services, verifying the quantity and quality with the Supplier Invoice and releasing the payment as per the agreed payment terms.
Accounts Payables Department: As companies have large number of transactions related to AP Process, hence many a times they need a separate division, branch or department to manage and handle all the AP related transactions. That department is referred to as Accounts Payable Department and sometimes just as Accounts Payables.
Eventually once we understand the accounts payable process and what are its elements we can easily understand what is being referred to at any point in time.
Related Links
You May Also Like
-
Warehouses may seem like a simple, straightforward concept, but they actually include a variety of different types of warehouses that all have their own niche. The type of warehousing that’s right for you depends on your specific industry, location, and needs. From private warehousing, distribution centers, and climate-controlled warehouses, there’s an option to suit every business.
-
Accounts Payable Journal Entry
Although in the large organizations the Procure to Pay Accounting process starts when the purchase order for supply of goods is released to the supplier. To keep things simple in the beginning we will discuss the core accounting entries related to the Accounts Payables process.
-
In the normal course of business, customers are likely to return orders from time to time due to various reasons and business should design processes the manage and accept such returns. A well designed returns management process can reduce costs and issues associated with returns or exchanges.
-
Subsidiary Ledgers – AP Ledger
An accounts payable invoice gets recorded in the Account Payable sub-ledger at the time an invoice is received and validated that the respective goods corresponding to the invoice have been received. Then it is verified and vouchered for payment as per the payment terms agreed with the Supplier.
-
We need a strong payables process so that it provides us with a high-productivity accounting solution to process vendor payments. An integrated payables process provides strong financial control so you can prevent duplicate payments, pay for only the goods and services you order and receive, and maximize supplier discounts. Understand the key features of an effective accounts payable system.
-
Resource Planning is the process of planning for expected workload and determining the number of resources required to complete each activity in the warehouse. There are many types of warehouse positions, and they also vary by the employer, the scale of operations and location. Discussed here are generic positions applicable to warehouse management processes.
-
When a customer wants a product that has been stored in the warehouse, the same need to be picked off the shelf (or off the floor) and get it ready for shipping. Depending on how big is the warehouse, picking can take a while. (Many distribution centers cover more than 1 million square feet.). Hence, warehouse order picking methods are an important aspect within any warehouse.
-
After products have been received and passed a quality inspection, they need to be stored so that you can find them when you need them. This process is called putaway. The spot where you store a particular product is called a location. One section of a warehouse might have small locations for light items; another area may have large locations on the floor for heavy items.
-
Types of Inventory Count Processes
While dealing with lots of inventory in a warehouse, lots of things can go wrong. Shipments may not have the right number of units in them, or they could get damaged somewhere along the supply chain. Discrepancies in the stock may arise as part of every inventory control, and need to be corrected immediately after the inventory control procedure has been finished.
-
Inventory is money, and hence businesses need to perform physical inventory counts periodically to make sure that their inventory records are accurate. The traditional approach to conducting inventory counts is to shut down a facility during a slow time of year to count everything, one item at a time. This process is slow, expensive, and (unfortunately) not very accurate.
