Skip to main content

Why Accounts Payable is Important for Cash Management?

How is the success or failure of a business judged?

Profits.

There are two main factors that affect the profits of a company the money that comes in and the money that goes out. Accounts Payable deals with the second part.
Accounts payable deals with the money that the company has to pay to various service providers. While your product sales generate revenue, the accounts payable keeps track of how much of that revenue will turn into profit and how much should go towards your debts and other bills.
Here are the reasons why accounts payable service is important for cash management:

1. Save Money

It may not be obvious at first, but good accounting practices can help save a lot of money in the long run. By paying the creditors on time or before time, early payment discounts can be availed that can help the company’s bottom-line. Maintaining a good relationship with the suppliers also ensures that they give special discounts and information about new products that can help the company in the future.

2. Maximize Profits

By scheduling the payments strategically, AP can help maximize the profits of the company. It can also help avoid any penalties that are accrued due to late payment. AP can also ensure that there no duplicate payments. All of this ultimately helps maximize the profits for the business.

3. Intelligent Data Collection

AP is responsible for handling a huge amount of data. Hidden in this data is the intelligence that can help the company in many ways. The history of payments can be used to gain understanding about the company’s workings and can help make predictions for the future. Making accurate future predictions can really help in making the right decisions to secure the company.

4. Identify Thefts and Frauds

Since AP deals with all the scheduled and usual payments, they are the first ones to detect any discrepancies in the payments being made. This is why having a good AP team can safeguard the company from embezzlement, fraud or thefts.
A good accounts payable service does not only ensure a smooth functioning of the company in the present, it also helps in maximizing profits and expanding the company in the future.

Source : https://www.outsourcinghubindia.com/why-accounts-payable-service-is-important-to-cash-management/

Comments

Post a Comment

Popular posts from this blog

Hiring a Property Management Company

Owners with numerous properties and rental units are often stumped with the burden of managing incomes from them. It becomes a time-consuming and a daunting task to handle the various aspects of property management like handling rental incomes, owner’s funds and filing tax returns to name a few. Hiring a competent  Property Management Company  ensures an effective way to manage incomes from various let-outs, security deposits, reserve funds and even writing checks on owner’s behalf. Property managers exercise extensive skill and care into marketing rentals, retaining tenancy, maintenance and repairs thus saving your time and efforts! How an efficient Property Management Company handles your funds? An expert property management firm can become one of your greatest assets, if chosen wisely! So before you hire one, here are some features a management company should inherently possess to handle tenant and owner funds proficiently. 1. On-time Payment to Owners Proper...
Post a Comment
Read more

List of Accounting Outsourcing Companies

When it comes to running a business, Small and Medium Enterprises (SMEs) have to deal with a number of activities such as executing their core functions, dealing with clients, managing accounts, etc. However, all these can get taxing on the business operations in the long run. To help such businesses manage their routine workload, accounts outsourcing companies help in a great way. Accounts outsourcing involves hiring an external party to carry out activities such as rendering professional accounting services to clients within the time-limits, helping businesses to maintain their accounts database, etc. List of Accounting Outsourcing Companies Here is a list of the 5 best outsourcing companies that you can look out for. 1. OHI- OutsourcingHubIndia OHI specializes in  accounting outsourcing services . Started in 2006, it has created a niche for itself in the outsourcing sector with its top-notch working systems, excellent infrastructure and ethical work practices. Their ...
Post a Comment
Read more

Accounting Outsourcing Predictions for 2018 and Beyond

Accounting outsourcing is a trend that is on the verge of seeing a great transition. With available resources and advancement in technology, this sector will experience high demand in coming years. The outsourcing industry has seen a rise from 76.9 billion USD in 2017 to 88.9 billion USD in 2018. In the following years, this is only expected to increase, as earlier, only basic accounting, payables, taxes and calculation tasks were outsourced. But now things will evolve and businesses will involve outsourcing partners in more complex tasks. Considering the change that the  accounting outsourcing  industry is observing, here are a few predictions that will dominate the rest of 2018. 1. High Demand for Accounting Outsourcing The high demand for accounting outsourcing is due to many factors. As organizations get engrossed in more important business processes, outsourcing will help with efficient handling of accounting and financing tasks. Moreover, outsourcing acc...
Post a Comment
Read more