Suggestions on the management of accounts payable

Solutions

Expert Solution

The following may be adopted by the company for management of accounts payable-

The process with respect to the collection of accounts payable should be simplified. Managing the frequency of check up is extremely important part for simplifying; a reasonable frequency for checking the invoices must be set. Lengthy processes makes it more complex and difficult to manage.
If a complete invoice backup is ready only then in that case the invoices should be approved by the appropriate department heads and then signed by the designated personal.
More software based management of accounts payable should be adopted. As it is easier to analyze and reduce errors like entering the incorrect amounts, totals and time due for payments with the help of technology which might have occurred if recorded manually.
Aging reports, laser printed checks can be used by the company with the help of computer that will help in better management and more security. This shall also help in reducing the staff as a lot of things can be updated automatically in the system.
Cash and cash equivalents must be dealt with proper care. All the functions related to cash that is managing cash and issuing invoices should not be handled by a single person. This can be a high-risk area for company and can give rise to the situation of fraud.
In Accounts Payable, entries should be verified for real and cross checked for “dummy vendor”.
Negotiation terms with the parties should be very clear and if any discount period is allowed by them; that should be carefully kept in mind in order to avail discounts; or not attract unnecessary charges.
No matter what the size of the company is; management of accounts payable is of extreme importance as it can be used as a probable source of committing frauds and embezzlement of cash.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

accounts payable and accounts receivable

What is the difference between accounts payable and accounts receivable?

Would it be poor management to have large accounts payable and accrual balances even if they...

Would it be poor management to have large accounts payable and accrual balances even if they are paid on time? Why might an organization do this?

Paying $10,000 on an accounts payable results in a ______ to accounts payable. Select one: a)...

Paying $10,000 on an accounts payable results in a ______ to accounts payable. Select one: a) Debit b) Credit c) None of the above

1. Accounts payable (a .k.a. trade accounts payable) is the account credited when goods or services...

1. Accounts payable (a .k.a. trade accounts payable) is the account credited when goods or services are purchased on open account (meaning payment has been delayed - often due in 30 days). a. Explain the following: 1.5/10, n/30 b. In the above example, what is the effective interest rate earned by taking advantage of the discount (paying before the 30 days). 2. Explain the difference between accounts Payable and notes Payable . 3. Explain the difference between an interest bearing...

Cash $ 80 Accounts Payable $ 26 Accounts Receivable 12 Wages and Other Expenses Payable 111...

Cash $ 80 Accounts Payable $ 26 Accounts Receivable 12 Wages and Other Expenses Payable 111 Inventories 188 Long-Term Debt 203 Other Current Assets 26 Other Long-Term Liabilities 44 Property, Plant, and Equipment 355 Contributed Capital 356 Other Assets 99 Retained Earnings 20 Assume that the following events occurred in the quarter ended December 31 (amounts provided are in whole dollars): Paid $2,000,000 cash for an additional “other asset”. Issued additional shares for $2,000,000 in cash. Purchased property, plant, and...

cash collections of accounts receivable will increase and decrease _ 1) accounts payable , accounts...

cash collections of accounts receivable will increase ____ and decrease _____ 1) accounts payable , accounts receivable 2) accounts receivable, accounts payable 3) cash, accounts receivable 4) cast, accounts payable when developring cost functions , which of the following is false 1) the cost funtion must be believable 2) the cost function does not have to be reliable 3) personal observations of cost and activities provide the best evidence of a plausible relationship between a cost and its cost driver...

Consider the following data for X. Enterprise’s Accounts Payable: Year 1 2 3 Accounts Payable 78...

Consider the following data for X. Enterprise’s Accounts Payable: Year 1 2 3 Accounts Payable 78 85 92 Holding all else is constant, how should you adjust X’s year 2 earnings to obtain Cash Flows? Note: Use a positive number for any additions and a negative number for any subtractions Accounts receivables: Year 1 2 3 Accounts receivables 79 57 69 Holding all else is constant, how should you adjust X’s year 2 earnings to obtain Cash Flows? Note: Use...

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping....

Purchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping. The landscape designers and office staff use office supplies, while field supplies (rock, bark, etc.) are used in the actual landscaping. Purchases on account completed by Sterling Forest Landscaping during October are as follows: Oct. 2. Purchased office supplies on account from Meade Co., $3,560. 5. Purchased office equipment on account from Peach Computers Co., $5,120. 9. Purchased office supplies on account from Executive...

urchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping....

urchases, Accounts Payable Subsidiary Account, and Accounts Payable Ledger Sterling Forest Landscaping designs and installs landscaping. The landscape designers and office staff use office supplies, while field supplies (rock, bark, etc.) are used in the actual landscaping. Purchases on account completed by Sterling Forest Landscaping during October are as follows: Oct. 2. Purchased office supplies on account from Meade Co., $400. Oct. 5. Purchased office equipment on account from Peach Computers Co., $3,980. Oct. 9. Purchased office supplies on account...

Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt...

Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt impacted cash flow from one year to the next. 200-word minimum.

Subjects