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Capturing of Invoice - Matching with PO - GR to be done - Upload in ERP - Approval from Cash management - Final Payment to the Vendor.
you ordered your goods, you received your goods, you checked the invoices to make sure they matched what you actually originally ordered and received, now what?
1. Enter the purchases invoices into your bookkeeping system.
2. Write or stamp on them ‘entered’ or ‘processed’ to show they have been recorded in the bookkeeping system.
3. If you are using automated bookkeeping software that has an accounts payable ledger there is nothing further you need to do for the moment. When you want to see who you owe, you can pull up a payables report. This report should also let you know what date the invoices are due.
4. File the invoices away. You can use an alphabetical concertina folder, or a lever arch folder with alphabet tabs. Label the folder ‘Unpaid Invoices’. Make sure you only use this folder for unpaid purchases invoices so you don’t get mixed up with other paper work
5. After the end of the month you will receive a statement from each of your suppliers listing all the purchases you made during the month
6. Take your invoices out of the concertina folder because now you are going to match them to the statement. Make a tick on the statement next to the ones you have invoices for, and attach them behind. If there are any purchases on the statement for which you do not have an invoice, highlight it and phone the supplier for a copy. They will willingly email or fax one through because, of course, they will want their money! Never pay for an invoice that you do not have
7. Once the purchase invoice matching is complete, highlight the total owing then place them back in the folder until you are ready to pay. You could double check that all the statements added up, match the total tally on your spread sheet
I will assume that we working for a manufacturing company and supply is related to raw material The steps in the cycle will be as follows:
1. Identification of the need of raw material by the production department.
2. Production will send requisition to the Procurement Department to place an order.
3. Procurement will ask for quotes from prospective suppliers.
4. Purchase Order mentioning the proudct description, required quantity, rate and value will be prepared and sent to the selected suppllier.
5. Supplier will ship the goods as per PO.
6. Goods Received Note will be prepared for the goods actually received.
7. Liability will be booked in the system after making sure that all goods are received as per PO or credit notes are issued by supplier for any short supply.
8. Payment will be processed on or before the due date.
I am sure all the above cover all, but I have another answer , first before mention the cycle , I advice any one who work in AP accountant MUST know well the difference from Debit and credit , second the aim of AP which is review the paper you have from A to Z and don't leave it before know :
A) The Approval and legal steps to accept it.
B) The cod and that come from your managers or by practicing.
C) The payment Terms to pay it.
D ) Know the mean of reconcile SOA.
From all the above then you can say its good start to let your new AP accountant the way and let the work flow show him / her, as the cycle is HUGE really and have many branch's ( Supply Chain / Inventory / Supplier cards updated / Tax deductions if any / etc...).
Thank you, Mr. Mohammad Iqbal and Mr. Fetah on the answer wonderful
1- operation section demand items from store
2- store has not these items
3- store tell purchasing department to issue PO
3-purchasing managment issue purchase order and send it to vendor after finishing internal approval
4- the vendor supply item to store , the store deliver receiving report to purchasing managment and financial managment and vendor
5- store deliver quality report to purchasing managment and financial managment and vendor
6- vendor give invoice to store , store give it to purchasing managment
7- purchasing managment deliver invoice , reciving report , quality report , purchase order to financial managment
8- A/P revise paper and record the invoice
Full cycle accounting refers to the collective transactions associated with a specific business function such as sales, purchasing, and payroll. You can apply the "full cycle" concept to individual accounting jobs as well. A person in a full cycle accounts payable position has responsibility for all tasks related to the payment of suppliers and vendors for goods and services.
Accounts Payable
Accounts payable departments strive to pay invoices on schedule, ensure the accuracy and authenticity of invoices, and conduct departmental duties with a minimum of expense. A company with a well-running accounts payable operation saves money by processing invoices with efficiency, skilled staffing, and low operational overhead. The process should contribute positively to cash flow and support mutually beneficial relationships with suppliers.
Vendor Relations
The accounts payable cycle begins with the vendor. Maintain a good relationship with your vendor in order to help facilitate understanding should you face cash-flow issues. Show respect. You may have the ability to negotiate your terms if you communicate your needs or demonstrate good intentions. After you place your order with the vendor, you will receive the product or service. Log the receipt to confirm that the business received the order. Enter a description and the number of items or type of service provided. You have now created a pending account payable to the vendor based on the mutually agreed terms.
Invoice Handling
Your vendor will send you an invoice for the goods they shipped or service they rendered. When you receive this invoice, log it into your accounting system. Include the vendor information, the due date, and the total amount due.
Verify the information included on the invoice to ensure accuracy. Check it against documents such as the receiving report, purchase order, or bill of lading. Match the quantities, prices, and descriptions on each document to the invoice. If all the information matches, then authorize the invoice for payment.
Authorize PaymentOnce you authorize the invoice for payment, schedule the remittance for the next time your company prepares outgoing checks. When the check has printed, attach a copy of the invoice to the check and mail it to the corresponding vendor. File a copy of the check to ensure a clear audit trail.
