Accounts Payable

Purchase Orders are issued to buy products and services.  It is not necessary to keep a paper copy of Purchase Orders unless others in the company require a copy and do not have access to the Quick Books Company File.  Daily Automatic Backup of the Quick Books Company file is sufficient, otherwise.

When products and services ordered are delivered, vendors must have the appropriate company representative sign for those products or services and leave a copy of the delivery receipt.

 

The Cardinal rule for bookkeepers is:

      Enter only invoices

      Never enter statements

However, in small business, it is often necessary and advantageous to enter statements provided a method is followed completely.

 

The method that we use is:

As a reference number, use the coding of the date of the statement plus “ST” when entering a statement (e.g. 6/18/07    would be 061807ST).  Attach all invoices included in this statement.

During the entire process of handling documents related to purchases, staples are not used.  Rather very small binder clips (3/8”) are used to keep multiple page bills, delivery and credit card receipts together.  Only when the bills and credit card receipts are filed are they stapled together.

Information from delivery receipts for products is entered into Quick Books to increase inventory.  Company Bookkeeper(s) stamp “Entered,” and the date of entry of the delivery receipt (see Rotary Rubber Stamp with Rotary Rubber Stamp Date in List of File Location Materials below).  The delivery receipt is filed in an A through Z location (by vendor) called Accounts Payable Entered.”  This document will be used when the bill comes in from the vendor to verify that the bill is actually for the number of products received.

Information from delivery receipts for services is filed in an A through Z location (by vendor) called Accounts Payable To Be Entered.”  This document will be used when the bill comes in from the vendor to verify that the bill is actually for the cost of services rendered (often by amount of time).

When bills arrive from vendors, they are immediately filed in an A through Z location (by vendor) called Accounts Payable To Be Entered.”  Those for services are matched to paper delivery receipts for the same purchase order.

Periodically, Company Bookkeeper(s) enter bills from theAccounts Payable To Be Enteredfile into Quick Books.

Those for products are matched to paper delivery receipts for the same purchase order found in Accounts Payable Entered.”

After entering bills for products and/or bills for services, all bills, coupled with their matching delivery receipt(s) are filed in an A through Z location (by vendor) calledAccounts Payable Entered.”    Company Bookkeeper(s) stamp “Entered,” and the date of entry on each of the bills processed.

Periodically, Company Bookkeeper(s) issue to management

·      Accounts Payable Reports along with

·      Accounts Receivable Reports,

·      Liquid Cash balances,

·      Credit card balances and credit limits

Management decides which bills to pay and when to pay them

Company Bookkeeper(s) run checks to pay bills indicated by management to be paid from checking accounts.


 

Company Bookkeeper(s) pay bills indicated by management to be paid by credit card.

·      From Vendor website

·      Via email

·      Via facsimile

·      Via Telephone

Company Bookkeeper(s) stamp “Paid,” the date of payment the check number and bank account on each bill paid.

Company Bookkeeper(s) filed Paid Bills along with accompanying delivery receipts into an A through Z location called Paid Bills (By Vendor).”  This is the only point where staples are used to affix delivery receipts to bills and multiple bill pages to one another.

Locations for files are by personal preference.

·      Portable accordion files are excellent for “Accounts Payable To Be Entered” and for “Accounts Payable Entered” files, depending on the volume of bills received to be processed before payment is made.

·      File cabinet drawers are better for “Paid Bills” files as this file grows during the fiscal year.

The future is here:  the paperless bookkeeping system is here. (See Paperless Accounting)