5 Reasons To Use The Accounts Payable Module In Your Bookkeeping

Does your small business manage its bills due by hand, entering vendor invoices into the system only when they are paid from the business? If so, you're not alone. For many small ventures, this is a simple and easy method of accounting for expenses.

But is it the right method? As you grow your company, you will soon find that including vendor invoices and other financial obligations only when the money goes out creates more trouble than it solves. A better solution is to start using an accounts payable account in your bookkeeping. Why? Here are a few of the best reasons.

1. You Can Plan in Advance.

If your business doesn't clearly list out its financial obligations at any given time, you won't have a good idea of what you must pay and when. This makes planning your finances for tomorrow, next week, and next month very difficult.

2. Your Books Are Accurate.

Want to know how your business is doing right now? If your current, open obligations aren't entered into the system, you may not be able to know. Because your income is still being entered into the books as you receive it, the company's financial situation looks better than it should. In the end, your decisions that are based on incomplete data may be deeply flawed.

3. Others Can Fill In.

If there is only one staff person who knows what bills are due and when, that person is irreplaceable to the company. If the individual manually tracking bills is sick or goes on vacation, the work of keeping the company on track will be difficult or even impossible. And you'll have to recreate the system should anyone new need to do the job. 

4. Data Is Easy to Find.

When you enter pending invoices into an accounts payable module, it won't get lost or destroyed. Everyone is working with the same information. You know what the numbers are and can spot problems or errors more quickly. You can share data among departments. And you have confidence in your information when you speak with vendors.

5. It Reduces Paperwork.

Modern bookkeeping systems often allow businesses to digitize much of their data and documents. You could, for instance, enter an invoice into the accounts payable system, then scan and attach the original paperwork at the same time. This means less clutter in your office, greater ease of storage, and access from anywhere. 

Clearly, the benefits of implementing a proper accounts payable procedure within your accounting system is key to modernizing your books, streamlining activities, and making your information as accurate as it can be. Get started today by consulting with an experienced small business accounting service today. For more information, contact a company like Universal Accounting and Financial Services, Inc.

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When All Goes to Plan

When was the last time you sat down and made some concrete plans for your financial future? As in most avenues of life, your finances tend to go better when you approach them in a structured way. You need to set a monthly budget and stick to it, start paying off debt, save for retirement, and make wise purchasing decisions. This sounds easier than it is, which is why hiring a financial planning professional comes in handy. On this website, you will learn more about financial planning, when it is a good idea to call in the pros, and the benefits of taking finance seriously.


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