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Accounts Payable process:
Its starts from our inquiries for materials from vendors. Vendors in turn offer us the details of availability and the prices (for different terms of purchase), we may seek for a good price quotation for our required quantity of materials, after receiving the quotation and the terms and conditions of payment, we may order for the materials.The confirmed order is a buying agreement and the quotation is a selling agreement. When the materials are supplied as per the quotation in conformity with all the terms and conditions, we can say that the a Sales contract is completed. The obligation on the part of the buyer is the consideration, it can be present or future. The payments can be in the form of Bill of Exchange or Cheques payable at sight, after sight or after date. which depends upon the credit period available. The payment can also be in the form of Cash or Bank Drafts, Electronic fund transfers. The retirement of each purchase bill depends upon the credit period and limit sanctions by the vendor and the timely retirement and payment of the bills enhance the business reputation. (In case of Sales-reverse is the process). If the process is computerized for all the procedures it will enable controlling and monitoring costs and delivery of materials, follow up of the accounts in a more effective and and meaningful way. It will also enable tracking the vendor's bills as to its details.
Impact over the Business:
How a company manages its accounts payable processing affects two important business matters: cash flow and supplier relationships. Companies that apply best practices manage accounts payable so that the process both contributes positively to cash flow and supports mutually beneficial relationships with suppliers.
Regarding cash flow, accounts payable practices make a significant difference both in minimizing late-payment costs -- such as late-payment penalties, interest charges, and lost prompt-payment discounts -- and in creating efficient operations. A company with smooth-running, streamlined accounts payable operations saves money by processing invoices with a minimum of staff and a low cost of materials.
The Accounting Manager Is Responsible for Performing Specialized Accounting Work Required to Maintain the Authority’s General Ledger. Working Under The Direction Of The Director Of Finance, The Accounting Manger Directs And Coordinates The Daily Activities Of The Accounting Staff To Quickly And Accurately Record The Revenues, Expenditures, Assets, And Liabilities Of The Authority. The Incumbent Should Be A Highly Motivated Self-Starter With Supervisory, Review, And Proofing Experience. The Incumbent Is Also Responsible for Preparing Annual Financial Statements & Coordinating The Authority’s Annual Audit.
The Accounting Manager Is Responsible for Performing Specialized Accounting Work Required to Maintain the Authority’s General Ledger. Working Under The Direction Of The Director Of Finance, The Accounting Manger Directs And Coordinates The Daily Activities Of The Accounting Staff To Quickly And Accurately Record The Revenues, Expenditures, Assets, And Liabilities Of The Authority. The Incumbent Should Be A Highly Motivated Self-Starter With Supervisory, Review, And Proofing Experience. The Incumbent Is Also Responsible for Preparing Annual Financial Statements & Coordinating The Authority’s Annual Audit.
An Account Becomes Payable as per the our Company Purchase Order (PO) terms (i.e. Upon Delivery or upon invoice...Mostly Upon Invoice).
The process of paying out payable to the supplier after due date of credit period will be recognized as Payable Process.
Payable cycle is the term used to explain the time or days involved in paying out amount we owe to suppliers, it must be lower for better supplier relations but company can benefit by holding it for a little bit, but not long.
The biggest impact of it on organization is supplier future relations, better relations can result in extended credit periods and discounts.
Customers with better credit ratings attract more suppliers with long credit periods.
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