๐‘พ๐’‰๐’‚๐’• ๐’Ž๐’†๐’„๐’‰๐’‚๐’๐’Š๐’”๐’Ž ๐’…๐’ ๐’š๐’๐’– ๐’–๐’”๐’† ๐’•๐’ ๐’„๐’‚๐’‘๐’•๐’–๐’“๐’† ๐’„๐’–๐’•-๐’๐’‡๐’‡ ๐’†๐’™๐’‘๐’†๐’๐’”๐’†๐’”? ๐‘ซ๐’ ๐’š๐’๐’– ๐’‰๐’‚๐’—๐’† ๐’‚ ๐’‘๐’–๐’“๐’„๐’‰๐’‚๐’”๐’† ๐’๐’“๐’…๐’†๐’“ ๐’”๐’š๐’”๐’•๐’†๐’Ž?

 ๐‘พ๐’‰๐’‚๐’• ๐’Ž๐’†๐’„๐’‰๐’‚๐’๐’Š๐’”๐’Ž ๐’…๐’ ๐’š๐’๐’– ๐’–๐’”๐’† ๐’•๐’ ๐’„๐’‚๐’‘๐’•๐’–๐’“๐’† ๐’„๐’–๐’•-๐’๐’‡๐’‡ ๐’†๐’™๐’‘๐’†๐’๐’”๐’†๐’”? ๐‘ซ๐’ ๐’š๐’๐’– ๐’‰๐’‚๐’—๐’† ๐’‚ ๐’‘๐’–๐’“๐’„๐’‰๐’‚๐’”๐’† ๐’๐’“๐’…๐’†๐’“ ๐’”๐’š๐’”๐’•๐’†๐’Ž?


Iโ€™ve seen businesses that have bookkeepers that are great at paperwork but donโ€™t have a clear close process for month-end financial reconciliation. A common problem is not capturing expenses recorded as a liability or an accrued expense because the month-end close process occurs very shortly after the end of the month.

Most companies have an accrual-based accounting system which means they record revenues when earned and expenses when incurred. Not capturing these costs have an impact on the financial statements and cash expectations to cover bills for the following month.

๐‘จ๐’„๐’„๐’๐’–๐’๐’•๐’” ๐’‘๐’‚๐’š๐’‚๐’ƒ๐’๐’† ๐’Ž๐’‚๐’š ๐’”๐’†๐’†๐’Ž ๐’๐’Š๐’Œ๐’† ๐’‚๐’ ๐’Š๐’๐’”๐’Š๐’ˆ๐’๐’Š๐’‡๐’Š๐’„๐’‚๐’๐’• ๐’•๐’‚๐’”๐’Œ ๐’Š๐’ ๐’•๐’‰๐’† ๐’๐’—๐’†๐’“๐’‚๐’๐’ ๐’๐’‘๐’†๐’“๐’‚๐’•๐’Š๐’๐’๐’” ๐’๐’‡ ๐’‚ ๐’„๐’๐’Ž๐’‘๐’‚๐’๐’š, ๐’ƒ๐’–๐’• ๐’Š๐’• ๐’Š๐’” ๐’Š๐’Ž๐’Ž๐’†๐’๐’”๐’†๐’๐’š ๐’Š๐’Ž๐’‘๐’๐’“๐’•๐’‚๐’๐’•.

1. A poorly run process can mean missing discounts
2. Strained supplier relationships
3. Vendors demanding COD terms
4. Paying bills to soon causes unavailable cash for paying other bills
5. Invoices paid twice / Paying fraudulent invoices

To safeguard a companyโ€™s cash, the accounts payable process should have internal controls. Periodically companies should seek professional assistance to improve its internal controls.


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