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All tasks related to the payment of suppliers and vendors for goods and services
Regardless of the company's size, the mission of accounts payable is to pay only the company's bills and invoices that are legitimate and accurate.
This means that before a vendor's invoice is entered into the accounting records and scheduled for payment, the invoice must reflect:
a) what the company had ordered
b) what the company has received
c) the proper unit costs, calculations, totals, terms, etc.
The Accounts payable cycle is one of the internal processes of operating cycle in which time is measured for making cash outflows into cash inflows.
In the process of Accounts payable cycle time taken for receiving cash or money in accounts payable is measured. This time taken is directly proportional to the mean number of days taken for converting business into sales in the process of accounts payable.
Payable Cycle has several steps :-
1) As per our requirement we make the inquiry for the product or service
2) Based on our inquiry we get the Quotation from the vendor
3) Then the next step is to make PO
4) After the PO , the vendor has to supply the product or service based on Our order .
5) Then the Vendor will be sending the invoice along with goods delivery note or works completion report.
6) Finally once we receive the correct invoice as per our PO with delivery or WCR then we have to look at maturity of payment terms. then we can release the payment
