What is an Accounts Payable Invoice?
An Accounts Payable Invoice, or also referred to as a Balance Due Invoice or Accounts Payable Invoice Form, is a form or document used by individuals and business entities to state the due payments for certain goods or services that were purchased through their clients or suppliers.
How to fill out an Accounts Payable Invoice?
To fill out an Accounts Payable Form, you must provide the following information:
Enter the full legal name of your client.
Enter the address of your client.
Enter the email address of your client.
Enter the phone number of your client.
Enter the total amount of credits.
Enter all the applicable discounts for your purchases.
Enter the net amount of your purchases.
Enter the payment date of your purchases.
Mode of Payment
Mark the appropriate box that corresponds to your chosen mode of payment. You may select:
Enter important details about your purchases, your client’s status, and other information.
Enter the reference number assigned to the purchase.
Enter the current date.
Enter any comments about your purchases, your client’s status, and other information related to the transaction.
Debit and Credit Information
Enter the due payment date for the purchase.
Enter the reference number for the purchase.
Enter the amount of debit for the particular purchase. This is the amount that may increase an expense or asset account, or decrease an equity or liability account.
Enter the amount of credit for the particular purchase. This is the amount that may decrease an assets or expenses account, or increase an equity, liability, or revenue account.
Enter the total amount of the particular purchase.
Enter the notes assigned to this particular purchase. This document records information about certain payments.
Why is an Accounts Payable Invoice important?
An Accounts Payable Invoice is a vital aspect of any business’s cash flow management.
For any type of business entity, an Accounts Payable Invoice is needed in their balance sheet to see the status of their credit, prior period debts, and overall cash flow statement.
By utilizing an Accounts Payable Invoice properly, you will be able to maintain a good and strong long-term relationship with your clients since this certain document will help you pay your business’s bills on time.
If your Accounts Payable Invoice is managed properly by the right personnel, your business entity will be free of overdue charges, penalties, late fees, and other related payments.
Keeping track of your invoices will become much easier because of an Accounts Payable Invoice. By utilizing this document, you will be able to avoid missing your due payments and it will also help you avoid making overpayments.
Being able to manage your cash flows is also another great benefit of utilizing an Accounts Payable Invoice.
Is an Accounts Payable Invoice required in a business?
An Accounts Payable Invoice is a vital part of any business, regardless of its scale or type.
In an Accounts Payable Invoice, you will be able to clearly keep track of all of your payments to your suppliers, clients, and other creditors.
If you’re handling a large-scale business, traveling to other places may be part of your transactions. In cases like this, having an Accounts Payable Invoice will help you settle funds in a much efficient manner.
An Accounts Payable Invoice also contains information regarding internal payments like reimbursement payments, petty cash administration, and sales tax exemption certificate distribution.
Furthermore, an Accounts Payable Invoice will also contain information about your clients, vendors, suppliers, and other creditors. This document will contain their contact information, each and every one of their payment terms, and other important details regarding their transactions with your business.
This document will also be able to provide information regarding end-of-month reports. An Accounts Payable Invoice will let you know how much your business owes at the moment.
An Accounts Payable Invoice may also help you reduce costs. This document serves as a direct line contact between your business and your clients or suppliers. You may be able to get more discounts or more relaxed payment terms through an Accounts Payable Invoice.
What should an Accounts Payable Invoice include?
To create a complete Accounts Payable Invoice, you must be able to provide the following information:
- Name of your client/vendor/supplier
- Address of your client/vendor/supplier
- Email address of your client/vendor/supplier
- Phone number of your client/vendor/supplier
- Total credits
- Net amount
- Payment date
- Mode of payment
- Reference number
- Current date
Can I make my own Accounts Payable Invoice?
Yes, you can make your own Accounts Payable Invoice. To do so, you must include all the information relevant to a purchase.
Who should maintain an Accounts Payable Invoice?
Ideally, you must assign a group of people or a department to handle your business’s Accounts Payable Invoice and other transactions related to the said document for an easier and much more efficient way of maintenance.
But if you happen to run a small-scale business, having at least one or two people maintaining your business’s Accounts Payable Invoice would be the best choice to avoid internal fraud or embezzlement.
By doing this, you will be able to pinpoint the person doing the misdeed since the Accounts Payable Invoice is being maintained by a certain group of people.
What is the process in making an Accounts Payable Invoice?
The process of making an Accounts Payable Invoice involves the following steps:
- You will receive the bill for the goods or services you have purchased
- You will then review the details of the bill that was sent
- Once the bill has been reviewed, your ledger accounts must be then updated
- After all of your records have been updated, you must process all of your payments on time
What’s the difference between Accounts Payable and Trade Payable?
Accounts Payable refers to your short-term payments like debts or obligations.
On the other hand, trade payable refers to the money you owe your clients or suppliers for goods directly related to your inventory.