Accounts payable is the aggregate amount of an entity's short-term obligations to pay suppliers for products and services which the entity purchased on credit. There are many responsibilities involved in running a business successfully, but maintaining strong control over accounts payable is among the most critical. If organization leaders do not have proper oversight of these processes, it’s possible for errors to negatively affect the bottom line and even a company’s reputation.
According to Inc. Magazine, there are a few primary reasons that supporting cash flow and cultivating positive business relationships are among the most important functions of accounts payable. If best practices are not being adhered to, it’s possible for problems such as late or duplicate payments to occur, and these errors can severely damage a company's reputation.
Source: Technologyinsight; AccountingTools
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