What's going on with my Accounts Payable?

Last month we walked through the best way to find out if you have an Accounts Receivable problem.  Now that the Receivables are nice and tidy, it's time to talk about some of the telltale signs that your Payables need a little attention.

Why is it bad?

The consequences of bad Accounts Receivable were distinctly bad because they could result in higher tax liability just because of the bad records.  While the consequences of bad AP aren't nearly as specific, it is still an area you should pay attention to improving.  It becomes frustrating to try to pay your accurate liabilities (bills) when they are buried in ugly bunches of inaccurate ones.

How do I know if MY Accounts Payable data is a mess?

When you run an AP Aging report, you should immediately feel like each of those vendor balances are accurate.  Negative amounts are an instant red flag, as are transactions dated significantly in the past.

What can I do?

Determining the appropriate way to correct this problem AND prevent it in the future is highly dependent on the specific processes set up for each business and consideration must be given to what adjustments may have been made on previous closed periods (tax returns). We can review your reports, advise, and instruct on a way to improve the process going forward.