How to Organize the Accounts Payable in a Small Office
A small office's accounts payable is a current liability account made up of debt obligations that must be paid within the next 12 months. It’s important that the documents supporting these debt items are organized so that payments on these obligations are made on time. The timely payment of accounts payable maintains the organization's credit standing plus ensures good and stable relationships with creditors and suppliers.
Match received invoices with their purchase order and receiving or service completion document. A valid and payable invoice exists when an approved purchase order was created and items on the order were received or services were completed. Create folders by vendor name to hold unmatched purchase orders, receiving documents and other supporting paperwork.
File accounts payable documents by payment date. After invoices are matched with supporting documents, check the due date and set a payment date for the invoice. Organize the invoices in folders that represent each day of the month. When you determine the payment date for the invoice, file it under that day. An accordion folder, which doesn’t occupy much space, can be used to keep the documents organized; each tab can represent a day of the month. If an accordion folder is too small, consider using hanging files which provide more room for paperwork. Assign only the day of the month to each folder or file; when the current month ends, you can reuse these files for the next month.
Include in your daily schedule a review of that day’s file of accounts payable. If there are invoices filed under that day, issue a payment for the invoice and mark it as paid. The invoice should note the payment date, the check number or transaction ID, if paid electronically, the amount paid and identification of the person that processed the payment.
File paid invoices in files created for each vendor or creditor. The vendor’s file should contain all paid invoices since the beginning of the accounting or 12-month period. The documents in this file support the payments made to the vendor. If a problem arises on a payment or a vendor claims payment was not received, this documentation can provide support on when the payment was completed and the items that were paid or not paid.