Accounts PayableAll businesses at one point or another will buy something for their company. A perfect example is when the company orders office supplies. Accounts Payable is how a business keeps track of the money that is owed to its suppliers. This is shown as a liability on a balance sheet. Whenever an invoice is received for a product or a service rendered, it typically is entered into the Accounts Payable ledger for approval. Accounting Seed allows you to pay vendors easily. With Accounting Seed, you can manage your credit cards, accounts payable, and purchasing with ease.
How is this different than a Cash Disbursement?A cash disbursement is when you are actually taking the money out of your Bank Account and paying for the good or service. After an invoice has gone through the approval process in Accounts Payable, it is authorized for payment in the form of a cash disbursement.
Purchase OrderA purchase order is an official order that is issued by a buyer to a seller. It has information on the specific products or services ordered as well as the quantities and the prices that were agreed upon. This is a legally binding agreement on the part of the purchaser to actually buy and pay for what was ordered.
Link Between Accounts Payable and Purchase OrdersBefore any Account Payable can be approved for cash disbursement, it must first go through an approval process to ensure that the invoice is for the proper amount. Comparing the invoice to a Purchase Order allows you to make sure that you are being billed for the correct amount. This can serve as an Automate Approval. When the invoice matches the purchase order, then it is able to be disbursed to the vendor.
Tips from Accounting Seed
Reach out to Accounting Seed by emailing us at firstname.lastname@example.org to discuss how we can successfully manage your company’s Accounts Payable and Purchase Orders. Request a free demo or speak to one of the elite accounting software solution providers of 2018 by calling (410) 995-8406 today.