ACCOUNTS PAYABLE reviews are usually done once or twice monthly, although they can be done more frequently for special items such as postage, petty cash, or freight deliveries. The important thing, from a cash management standpoint, is to pay bills exactly on time and not early, to better maximize cash flow.

Despite the advantages of automation, there’s nothing wrong with a manual ACCOUNTS PAYABLE system. As long as the system performs the necessary tasks, such as assigning the right amount to the right account, tracking payments, and performing other basic accounting tasks, a manual system can be as effective as an automated one. But no matter how basic, each system must contain two primary components:

ACCOUNTS PAYABLE subledger summary Each ACCOUNTS PAYABLE system must contain a comprehensive set of vendor ledgers—whether they are recorded on index cards, in a ledger book, or on the back of candy wrappers stuffed in used envelopes—that track purchases and other financial obligations. Each record must be kept up to date with current purchases and total amounts, and they must all be sorted or categorized for easy access. After that, the format is up to your company’s accounting department.