As much as we want our customers to pay us promptly, timely payments to our vendors are also an essential part of doing business.
Vendors are an important part of your business. Paying vendors promptly ensures that your relationship remains good and does not disrupt your ability to service your customers.
Processing payments to vendors is not quite as straight forward as it may seem, especially if you have many vendors and many associated invoices to process each payment cycle. There needs to be controls to ensure that invoices are for legitimate purchases, that the goods or services have indeed been received and accounted for, etc.
Once that has been verified, there is the task of reviewing who to pay and how much to pay. For instance, if the vendor has given 45 days credit, should you pay if the invoice is not due yet?
There’s also the need to prioritize cash flow. Once the vendors are paid, would there be sufficient funds to meet other business expenses like salaries, rent, and still have enough left over for on going business development?
Sage 300 Accounts Payable makes it easier to control and process payments to vendors.