Faye Wang

The full accounting cycle is a step process for recording transactions, preparing financial statements, and making closing entries for the monthly or annual accounting period. At year-end, closing entries include transferring net income or loss to the retained earnings account and resetting income and expense accounts to zero for the next accounting period.

Outsource your accounts payable department. Companies that prioritize accounts payable use automated systems and research-proven best practices to deliver satisfactory and timely payments every single time.

Many types of EDI payment methods are available to businesses. If you are considering EDI for the first time or are expanding your existing EDI platform, there is at least one method to fit your budget, technology structure, and business transaction needs. Here are two of the top EDI payment methods and their descriptions.

So, what’s the difference between the accrual method and the deferral method in accounting? Let’s explore both methods, walk through some examples, and examine the key differences.

Variable expense ratio — also called the variable cost ratio — is a means of understanding how variable costs impact a business’s net profits. The variable expense ratio expresses a company’s variable expenses as a percentage of its net sales. This is a useful metric that can help businesses in matters like pricing and production scheduling.

Vendor management is the process of supporting and empowering vendors through establishing and nurturing long-term relationships with them. The method includes finding and choosing the right vendor for the company’s needs, controlling the costs and vendor risks, and paying for the services and goods consumed. The term ‘vendors’ also refers to suppliers or service providers.

Three-way matching is a process of paying the supplier accurately by matching three essential documents. These three documents are the following: 1) supplier/vendor invoice, 2) purchase order, and 3) receiving report.

Having an automated accounting system is now considered a must-have for larger companies that deal with thousands of transactions a day, but it’s a relatively well-kept secret when it comes to smaller and medium-sized businesses.

The AP process starts when the accounts payable department receives an invoice. Invoices can arrive through a huge variety of different methods, including electronic invoices, physical mail, fax and many other possibilities.

Accounts payable automation benefits are numerous, particularly for companies making business-to-business (B2B) payments. The accounts payable (AP) process serves as a guardian of the funds distributed by a business. Once those funds have been applied to an invoice, they can be extremely difficult to retrieve in instances of double payments, accidental payments, and especially in occurrences of internal fraud.

Using AP software that allows mobile on-the-go access is another way to boost AP department productivity. You might find the whole “streamlining your AP workflows” to be a daunting task, but it certainly improves the efficiency of your operations.

Using invoice automation mitigates the risk of fraud and leads to numerous other business advantages, including enhanced payment processing efficiency, better allocation of resources, and superior reporting capabilities. Keep reading to learn how using invoice automation software can benefit your business.

When you start looking into automating your accounts payable workflow, you’ll notice common features across AP software systems: tax form processing, electronic funds transfers, and of course, OCR invoice processing.

The supplier payment process involves tax compliance, fraud monitoring, currency exchange rates, banking requirements, and more. If your supplier payment process can’t nimbly respond to these factors, you’ll have to manually adjust to each vendor’s situation.

A pro forma invoice is fundamentally a preliminary bill of sale issued by sellers to buyers before the delivery of goods is completed. A pro forma invoice is an estimate or a quote that outlines the terms of the sale. It typically contains product descriptions, price of products, terms of delivery, and an expiration date of the invoice. The pro forma invoice is meant to give a cost estimate of the sale, not the final sale, and the terms are subject to change.

You want to integrate as seamlessly as possible with existing accounting and ERP systems. However there are many key steps along the supplier payment process that still require significant manual effort beyond sending out payment instructions to the transfer API for bank, ACH, and wire services.

Accounts payable jobs will change in the future. New technology is obsoleting the position and a new way to think about what the job description looks like.