This is general information, not tax or legal advice. Rules and rates change, so check GOV.UK or ask an accountant.
Accounts payable is the money you owe suppliers. Managing it well protects your supplier relationships, your credit and your cash.
A simple process
- Receive the bill. Collect invoices in one place, not across inboxes and drawers.
- Check it. Does it match what you ordered and received? See purchase orders explained.
- Record it. Enter the supplier, bill number, dates, the expense account and tax on each line, and attach the document.
- Approve it. For larger amounts, a second person should approve. This also protects against fraud. See invoice fraud.
- Pay it. On or just before the due date, from the right account.
- Reconcile it. Match the payment to the bank statement.
Use the due date, not the date it arrives
Enter the due date from the supplier’s terms. Then the ageing report shows what is due soon and what is overdue.
Run an ageing report before you pay
Look at what is due this week and next, then decide what to pay with the cash you have. Prioritise essential suppliers and anything with late fees. Where you can, pay on the due date, not early, to keep cash in the business.
Watch for problems
- Duplicates. Use the supplier’s invoice number as the reference.
- Missing VAT invoices. You generally need one to reclaim VAT.
- Credit notes. Record them so you do not pay for returned goods. See credit notes explained.
- Supplier statements. Compare them with your records each month.
Keep suppliers on your side
If you cannot pay on time, tell the supplier before the due date and agree a new date. That is better than silence.
How AvrioBooks helps
Record bills with attachments, split them across accounts, pay and part-pay them, use purchase orders and credit notes, and run Aged Payables. Approval workflows are on the Premium plan. See accounts payable software and create a bill and record a payment.
Frequently asked questions
What is accounts payable?
The money your business owes to suppliers for goods and services bought on credit.
When should I pay supplier bills?
On or just before the due date. Paying much earlier takes cash out of the business sooner than necessary.
How do I avoid duplicate payments?
Use the supplier's invoice number as the bill reference and check the ageing report before paying.
Does AvrioBooks have approval workflows for bills?
Yes, on the Premium plan.
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