Professional Account Payable Services for General Contractors

General Contractors need to keep a close eye on their accounts payable numbers for a variety of reasons. Having an accurate accounting of what is owed to outside companies for goods and services is important to your bottom line and peace of mind.  Accounts payable is a term used in accounting to describe the money owed by a business to its suppliers of goods and services. The total amount of accounts payable is an important indicator of a company’s financial health, because it represents the total amount of money that the business has committed to pay for items it has already received.

Bookkeeping for Contractors helps you understand Accounts Payable Services

Generally, a company will maintain a tight balance between its accounts payable and its accounts receivable (the money owed to it by its customers). This helps ensure that the company does not become overextended financially and is able to meet its obligations as they come due. However, if a company has difficulty collecting what it is owed, it’s accounts payable balance may start to grow, putting it at risk of financial collapse. The team at Bookkeeping for Contractors can help your business run smoothly by keeping track of these records.

The Process for Accounts Payable

 STEP 1 - RECEIVING AN INVOICE.

When a business receives an invoice, the first step in the accounts payable process is to review it and make sure that the goods or services listed on the invoice were actually received. Once it has been verified that the invoice is accurate, it is added to a queue for approval. 

STEP 2 - APPROVING THE INVOICE.

Once an invoice has been added to the queue for approval, the next step in the process is to approve it. This involves verifying that the amount of the invoice is correct and that there are enough funds available to cover the cost. Once the invoice has been approved, it is added to a queue for payment.

 STEP 3 - ISSUING A PAYMENT.

The final step in the accounts payable process is issuing a payment. This involves transferring funds from the business' account to the vendor's account. Once the payment has been issued, the invoice is marked as paid and removed from the queue.