Define Accounts Payable
Payables are often categorized as “Trade Payables” & “Expense Payables”. “Trade Payables” are the monies due for the purchase of physical goods that are recorded in Inventory. “Expense Payables” are the monies due for the purchase of goods or services that are expensed.
How do we define Accounts Payables:
We all use utilities. For example we take various services from the phone company, the gas company and the cable company. They provide us the goods and services first and as the end of the agreed billing period they raise an invoice on the customer. In this case the Utility Company is our Creditor and they have provided us the service on credit. The amount payable to the utility company is the “Account Payable” for us, which needs to be paid in very short-term to the utility company (Supplier/Creditor) to enjoy continued services.
Similarly credit is extended in the normal course of business to the customers on purchase of goods and services and needs to be paid off within a given period of time in order to avoid default.
Payables are often categorized as “Trade Payables” & “Expense Payables”. “Trade Payables” are the monies due for the purchase of physical goods that are recorded in Inventory. “Expense Payables” are the monies due for the purchase of goods or services that are expensed. Common examples of Expense Payables are utilities like telephone and electricity.
Related Links
You May Also Like
-
This article discusses the key documents that gets generated during the import/export process. These documents may apply to both invoice to cash as well as order to cash cycles. Also learn the major custom docments for India.
-
Miscellaneous Warehouse Processes
At the end of each inventory control, the Contractor provides the Ordering Person with an inventory report which contains a list of all stock adjustments. The Ordering Person uses the report to create, by use of his/her own means, necessary value and accounting adjustments related to the stock. Let us look at some to the mislaneous warehouse processes not covered earlier.
-
Warehouses can be places where piles of packed or loose products occupy space. If left disorganized, it will become very challenging to identify products for packing or picking. Hence, proper organization of warehouse is very important. Warehouse labeling systems eliminate this problem by making sure products are easily identified and managed during the warehousing and shipping process. Labeling is the most functional and cost-effective way to keep your warehouse organized and operating efficiently.
-
What is the difference between Warehouse Management & Inventory Management?
The terms “inventory management” and “warehouse management” are sometimes mistakenly used interchangeably as they both deal with operations and products of industries. Despite their few similarities, there are many notable differences between warehouse and inventory management systems.
-
Companies and businesses have huge transactions pertaining to their accounts payable process. They receive goods and services from various suppliers and they need to manage timely payments to these creditors to avoid default and adhere to the payment terms.
-
Accounts Payable Journal Entry
Although in the large organizations the Procure to Pay Accounting process starts when the purchase order for supply of goods is released to the supplier. To keep things simple in the beginning we will discuss the core accounting entries related to the Accounts Payables process.
-
Inventory is money, and hence businesses need to perform physical inventory counts periodically to make sure that their inventory records are accurate. The traditional approach to conducting inventory counts is to shut down a facility during a slow time of year to count everything, one item at a time. This process is slow, expensive, and (unfortunately) not very accurate.
-
When a customer wants a product that has been stored in the warehouse, the same need to be picked off the shelf (or off the floor) and get it ready for shipping. Depending on how big is the warehouse, picking can take a while. (Many distribution centers cover more than 1 million square feet.). Hence, warehouse order picking methods are an important aspect within any warehouse.
-
At a high level, the essential elements in a warehouse are an arrival bay, a storage area, a departure bay, a material handling system and an information management system. As part of the process for enabling a warehouse layout, you must define warehouse zone groups, and zones, location types, and locations.
-
Warehouses may seem like a simple, straightforward concept, but they actually include a variety of different types of warehouses that all have their own niche. The type of warehousing that’s right for you depends on your specific industry, location, and needs. From private warehousing, distribution centers, and climate-controlled warehouses, there’s an option to suit every business.
