One simple and necessary step to knowing how much flexibility you have on paying each account is to review existing supplier payment terms. If you have a contract with a supplier, it should include payment terms and available credit. Keep these on file so you can reference them if you should get in a tight spot.
Be cognizant of the risks of getting behind on your bills. You may alienate reliable providers, risk damaging your company's credit, and could ultimately face legal action. Unpaid bills also cause stress and distraction at a time when you should be focused on managing your business.
Dig Deeper: Creating a System of Accounts Payable Safeguards
Setting Up Accounts Payable: Recognizing Trouble Spots
Once you're accustomed to your accounts payable system, you'll start to observe trends. Notice when the most spending occurs for your business. What categories of spending are most in flux? When do you rely most heavily on your suppliers to finance inventory?
For retail companies, the holidays are a time of tremendous inequity of accounts payable and accounts receivable. The goal is to be financially prepared for times of big spending that come in advance of payments received, but when that doesn't happen, there are a couple of simple things you can do to maintain relationships that might come under stress.
First, Amenta advises clients to be proactive. Be honest with your suppliers about when, if not within a 30- or 60-day window, they can expect to receive a payment. "Pick up the phone, call creditors and let them know what's going on," she says. "Be clear. Say 'I'm going to pay this much this month, and this much next month, even if it's just a token amount so they know you are on it."
Second, thank your suppliers for their flexibility and remind them about your prompt previous payments. If they become hostile about not being paid, offer references to your long-term financial stability, or even last year's balance sheet to prove your continued viability. Help them get over their "check-is-in-the-mail" concerns.
Dig Deeper: What to Do When You Can't Pay a Bill
Setting Up Accounts Payable: Choosing Business Accounting Software
Once your accounts payable grows beyond the size of a bill or two a day – or a manageable handful of checks to cut each week – you might want to consider either putting an employee in charge of the basic data-entry and accounting or adopting software to streamline the process.
Some free options online can help at any stage of your company's growth. Check out Outright, a free online bookkeeping system with a clean aesthetic. Some businesses swear by QuickBooks, which offers a free online trial. Intuit's Quicken is another choice. If expenses are a big part of your accounts payable, check out software options that help integrate employee expenses into your accounting system, such as Expensify or Concur.
If you're looking to implement software but don't feel as if you have the time or skills to set up the system, you can always hire a business accountant or bookkeeper to integrate an accounting system for you. Hiring for a quick set-up process should only require a contractor. Search sites such as eLance.com or TeaSpliller.com or even Craigslist can help you find a qualified professional in your area.
Dig Deeper: How to Choose Business Accounting Software
Setting Up Accounts Payable: Additional Resources
With a variety of training and professional development programs for people working in accounts payable, the non-profit group International Accounts Payable Professionals can be a great training resource. The group's website also offers accounts payable form templates for you to download.
If you're just getting started and find yourself unfamiliar with some of the terminology involved in accounts payable, check out this thorough online glossary.
The Financial Managers Society is another professional organization where you can look for advice, tools and guidance.
