Every business usually has various sources of income in order to get working capital to cater for salaries, payment of bills among other things. A business may sell goods for cash or it may also do it on credit. This is known as accounts receivables or debtors. Accounts payables on the other hand are the debts that the business owes to outsiders. For example it might buy products on credit. The success of a business is on managing and striking a balance of the receivables and payables. Accounting rule states that for a business to be said to be operating optimally then the payment period for the receivables must be shorter than that for the payables. Learn more about accounts payable here.
In order to track what payables a business has, there are usually a lot of paper work and signed documents to prove all these. For the very large organizations, it might have multiple accounts payables and it might be confusing in tracking which is which. This is why it becomes essential to automate the accounts payables. There is a software that does this. When the accounts payables are automated, then it becomes easy to monitor and track invoices the firm has paid and the pending ones. This in overall avoids confusion and maintains a healthy relationship between the business and the suppliers.
One of the benefit you get from the accounts payable automation is in terms of speed. Having to manually check and track for documentation can be time consuming. However when everything is entered into a system, then all the data you need can be accessed by the click of a button. This in effect makes the company more efficient since less time is wasted. Besides since all the data is in a computer or in digital form, then that will mean less storage costs since there are no longer physical documents.
The accounting software can be accessed by several people form different departments any time they need and hence they are able to get real time data as it is. For instance the account balances as per a particular period. This is because the system automatically updates once a transaction is made and money deposited. There is also greater transparency that comes about with this system. Unlike when doing the tracking and recording manually which is susceptible to cooking figures, the automated system cannot be compromised. In case of any discrepancies it will automatically show and corrective action taken. Explore more on accounting here: https://www.britannica.com/topic/accounting.
