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accounts your pay system controls how and when money goes a company bank account to pay a third party. It can be a source of valuable information for procurement professionals as well as a useful tool to control. This means that you should notice
main uses for purchases in accounts payable system are: -.
o Monitoring cash flow. When a supplier invoice is input to the accounts payable system of the invoice date is compared with the payment for the supplier. This determines when the money leaves your bank account to pay your supplier. The longer payment term the longer it is before you pay the supplier and the longer you keep the money in your business. Inspection payment terms from time to time make sure you are not paying suppliers early. This will make your good friends CFO!
o improve supplier relationships. Payment you end up with is often the result of hard negotiations with the suppliers which obviously will be paid as soon as possible. What irritates most suppliers to recognize higher payment than they wanted and then have clients further delay payment! If you want a good relationship supplier ensure that your systems and accounts staff pay on time.
o prevent fraud. Fraud occurs when someone adds a fictitious supplier accounts payable transactions and the proposed bill from the supplier. A payment is then paid for that account in a bank account owned by the person who commits fraud. This type of situation can be avoided by separating duties and authorities to add new suppliers for the processing of invoices.
o avoid over-payments. A properly run trade system can prevent you from unwittingly over-paying suppliers by delivering goods received notes with purchase orders and purchase orders with the supplier invoices. This prevents you from paying for the amount not receive or pay the wrong price.
o delete information source. Accounts payable system will contain two types of data. Static data supplier accounts (such as payment terms, supplier address and price) and dynamic data on products purchased and quantity. Both types of data can be very useful in identifying opportunities to save money by strengthening spending and reduce the number of suppliers in order to increase leverage.
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