Accounts payable: paying suppliers correctly, once, and on time

Accounts payable is the money your business owes suppliers for goods and services already received. As a process it covers everything between an invoice arriving and it being paid: capture, matching, approval, scheduling, payment and recording. As a balance it is one of the largest liabilities on most small company balance sheets, and one of the least watched.

The failures are undramatic and expensive. The same invoice paid twice because it arrived by email and by post. An early-payment discount missed because nobody looked at the terms. A supplier's bank details changed by someone who was not the supplier. None of these require carelessness — they require only that no fixed routine exists.

What a working AP process contains

• One intake point for supplier invoices, so nothing lives in a personal inbox.
• Capture of the fields you actually need: supplier, invoice number, date, amount, tax, due date, purchase order reference.
• Duplicate checking against supplier plus invoice number plus amount — the three that catch nearly all repeats.
• Matching to a purchase order and to evidence of receipt, for anything above your threshold.
• Approval by someone other than the person who raised the request, with a stated limit per role.
• Payment terms recorded per supplier, including any early-payment discount, so scheduling is a decision rather than a habit.
• A payment run on a published day, with the batch reviewed before release.
• Bank-detail changes verified out of band, always, without exception for urgency.
• Posting to the ledger with the invoice attached to the entry, so the record and the evidence stay together.
• An aged payables view so you can see what is due and what is overdue.

Duplicate payments are more common than most owners believe, and they are rarely recovered without asking. The cheapest control is a rule that no invoice is entered without its invoice number, plus a check on supplier-number-amount before payment. It costs seconds per invoice and catches the copy that arrived twice through different channels.

Running it

1. Publish one address for supplier invoices and tell suppliers to use it. Invoices arriving to individuals are the root of most AP problems.
2. Enter invoices promptly rather than at month end — late entry is what causes missed due dates and duplicate payments.
3. Match to the purchase order and to receipt for anything above your threshold; below it, approve on the budget owner's confirmation.
4. Never let the requester also release the payment.
5. Diary early-payment discounts. A 2% discount for paying twenty days early is a very high annualised return, and most companies never take it.
6. Pay on a published run, weekly or fortnightly, and review the batch: new suppliers, changed details, unusual amounts.
7. Verify any change of bank details by voice on a number you already held, never one from the invoice or the email requesting the change.
8. Reconcile the supplier statements you receive against your ledger monthly — this is how you find the invoice you never entered.
9. Review aged payables weekly and talk to suppliers before you are late rather than after.

Payables are a cash decision

Paying everything immediately feels virtuous and is usually wrong; paying everything late is cheap financing that costs you supplier goodwill and eventually price. The sensible position is deliberate: pay on terms as standard, take discounts where the arithmetic favours it, and pay early only for suppliers where the relationship is worth more than the cash. What matters is that this is a decision someone made, recorded in the supplier record, rather than a function of who chased hardest.

The ledger side lives in Ettex Books: a chart of accounts structured the way accountants expect, double-entry journal entries with full debit and credit control, categories and auto-categorisation rules so recurring supplier costs file themselves, attachments on any entry so the invoice stays with the transaction, multi-currency with rate tracking for overseas suppliers, bank statement import from CSV or OFX with reconciliation, recurring entries, instant search across all periods, and P&L and ledger export as PDF, CSV or XLS. Supplier records and payment terms sit in Ettex Contacts, invoices you issue are in Ettex Invoices, approval requests can be collected through Ettex Forms, and the payment policy belongs in Ettex Docs.

Plainly: Ettex is not an AP automation platform. There is no invoice capture or OCR, no supplier portal, no automatic three-way matching, no approval routing by amount, no payment execution and no bank connection. Invoices are entered by a person and paid through your bank. That suits a company processing tens of supplier invoices a month; at hundreds, AP automation software genuinely pays for itself.

Where money leaks

• Invoices arriving to individual inboxes, so nothing is centrally visible.
• No invoice-number rule, which removes the main duplicate check.
• Payment released by the person who requested the purchase.
• Early-payment discounts recorded nowhere and therefore never taken.
• Bank-detail changes accepted by email — the single most expensive failure in this list.
• Invoices entered at month end, producing late payments and missed queries.
• Supplier statements never reconciled, so a missing invoice surfaces as a demand.
• Recurring subscriptions on cards, outside the AP process entirely and never reviewed.

Accounts payable works when invoices arrive in one place, carry an invoice number, are approved by someone other than the requester, and go out on a published run — with bank-detail changes always verified by voice.