Accounts Payable
What is Accounts Payable? Job Description and Responsibilities
It’s no secret that most companies need goods and services to operate daily, and processing payment for those essentials is the responsibility of the accounts payable specialist.
As an account payable specialist, also referred to as a clerk, you will receive invoices from various vendors and supply companies and keep track of the information with the assistance of accounting software programs. Once the accuracy of an invoice has been completed, the accounts payable specialist issues payment and logs the details of the transaction. Some accounts payable specialists are asked to help in the human resources department with payroll duties from time to time.
Accounts payable specialists also organize a company’s bills using spreadsheets and databases in addition to software programs to make records of invoices, contracts and payment due dates. As a result, the company ensures all its bills are paid on time and avoids additional charges or contract problems.
The need for an accounts payable specialist is usually at large companies, firms, businesses and various organizations across the business sector in such places as law firms, medical offices, industrial businesses, and retail stores, to name a few.
If you are deadline driven and don’t mind working overtime during busier times of the year, you might want to consider a career as an accounts payable specialist.
Skills Needed
In addition to work experience and some education, employers prefer accounts payable specialists who have a set of important skills. These might include:
1. General Computer Skills:
Bookkeeping, accounting, and accounts payable clerks should know how to use computer spreadsheets and bookkeeping software.
2. Extra Detail Oriented:
Bookkeeping, accounting, and accounts payable clerks are responsible for producing accurate financial records. They must pay attention to all details to avoid making mistakes and be able to correct errors that others have made.
3. Good Character:
Bookkeeping, accounting, and accounts payable clerks have overall control of a company’s financial records, which they must use correctly and keep confidential. It is necessary that an accounts payable specialist keep records transparent and keep abreast of any misuse of a company’s funds.
4. Mathematical Skills:
Bookkeeping, accounting, and accounts payable clerks use numbers daily and should be comfortable with basic arithmetic skills and problem solving.
Educational Requirements
If you want to pursue a career as an accounts payable specialist some future employers require a candidate to have at least a high school diploma or its equivalent. While many employers offer entry-level positions that do not require prior experience or training, employers may show preference to candidates with several years of accounting-related experience or formal education over those without.
It’s not unusual for an accounts payable specialist to earn an Associate’s Degree in accounting, finance or payroll accounting. Candidates with more specialized skills and training may have an advantage over those who simply have on-the-job experience.
It is not common for a candidate to have a Bachelor’s Degree in accounting or a related field to be considered for an accounts payable specialist position. But those who have earned a bachelor’s degree sometimes look for clerk positions to gain employment in a specific company or industry, while ultimately set themselves on a path to pursue a higher position.
Many online and campus-based colleges and technical schools offer certificate programs specific to accounts payable specialists. Should you opt to enroll in said programs, courses often include: Basic financial accounting, business math, computerized accounting and written business communication.
Certification
In terms of getting certified to become an accounts payable specialist the Institute of Financial Operations is a professional association where you can earn two distinct levels of accounts payable certifications:
1. Certified Accounts Payable Associates
This is a designation for those who have less than 5 years of accounting or bookkeeping experience. This certificate lets an accounts payable specialist show their skills within the profession while working at an entry-level position within a company or organization. CAPA candidates need at least 1 year of experience working with accounts payable and an Associate’s Degree in accounting or a related field, or 3 years of relevant work experience in lieu of a formal education. Once experience and/or educational qualifications are completed, candidates may take the CAPA exam. The CAPA designation is given after successful completion of the exam.
2. Certified Accounts Payable Professional
This is a designation for accounts payable professionals who meet one of the following qualifications:
At least 2 years of managerial experience with a Bachelor’s Degree or higher;
At least 3 years of managerial experience with an Associate’s Degree or higher;
At least 5 years of managerial experience with no degree required; and
All candidates must successfully complete the CAPP certification exam.
If those certifications are of no interest to the candidate, an alternative certification is offered via the American Institute of Bookkeepers. This association offers the Certified Bookkeeper Designation to qualified candidates. To qualify for the designation, candidates must have at least 2 years of professional experience in accounting, bookkeeping, accounts payable or a related field. After the minimum qualifications are met, candidates are required to pass a 4-part exam covering various accounting-related topics. The first two portions of the exam must be taken at one of the 300 Prometric Testing centers located nationwide. The remaining two sections are offered in an open-book format and are available online.
Accounts Payable Salary
Sometimes, bookkeeping, accounting, and accounts payable specialists may work longer hours to meet deadlines at the end of the fiscal year, during tax time, or when monthly or yearly accounting audits are required.
According to Salaray.com, bookkeeping, accounting, and accounts payable specialists held about 1.7 million jobs in 2016. The largest employers of bookkeeping, accounting, and accounts payable clerks were as follows:
Professional, scientific, and technical services 12%
Retail trade 10%
Wholesale trade 7%
Healthcare and social assistance 7%
Finance and insurance 7%
The professional, scientific, and technical services industry includes the accounting, tax preparation, bookkeeping, and payroll services sub-industry.
Workplace
Bookkeeping, accounting, and accounts payable specialists typically work in offices. Bookkeepers who work for numerous firms simultaneously may visit their clients’ places of business. They often work solo, but sometimes collaborate with other accountants, managers, and auditing clerks from other departments.
Most bookkeeping, accounting, and accounts payable specialists work full-time. However, according to Salary.com, about 1 in 4 worked part-time in 2016. Again, it is not unusual that these employees work additional hours to meet deadlines at the end of the fiscal year, during tax time, or when monthly or yearly accounting audits are required.
Related Alternative Careers
If you can’t find a position as an accounts payable clerk, there are alternatives. For instance, large companies typically have several different types of specialized accounting clerks, so you might get a similar job in the same setting. To illustrate, as an accounts receivable clerk, you would keep track of a company's invoices to make sure that clients and customers make appropriate payments. Alternatively, you could work as an auditing clerk, where your role would be to verify the mathematical accuracy of financial documents and postings. For either of these positions, you need a high school diploma, and you may need to have some postsecondary courses, too.
Future Forecast
As for the outlook for the employment of bookkeeping, accounting, and as an accounts payable specialist, it is projected to show little or no change from 2016 to 2026, according to the U.S. Bureau of Labor Statistics.
The BLS reports technological change is expected to reduce demand for these workers. Software innovations, such as cloud computing, have automated many of the duties performed by bookkeepers and accounts payable clerks. As a result, the same amount of bookkeeping work can be completed by less employees, which is expected to lead to job losses for bookkeepers over the next 10 years.
With more routinized tasks automated, these roles are expected to take on a more analytical and advisory role over the next 10 years, the BLS adds. For example, rather than performing manual data entry, bookkeepers will focus their attention on analyzing a clients’ books and honing in on possible areas for efficiency gains.
Since bookkeeping, accounting, and accounts payable specialists make up a large group, there will be many job openings from workers leaving the occupation. In the end, this means opportunities to enter this field should be more, despite the slightly projected decline in employment.
Accounting and also Accounts Payable (AP) management needs every firm to take an important look at their methods to ensure that they are doing everything feasible to deal with any locations of waste. The accounts payable cycle - also known as the balance dues cycle - is among the most vital procedures of an accountancy company.
In the accounts payable cycle, vendors pay to your business in your place. There are 4 crucial activities that an account payable expert should perform throughout the receivable cycle:
Initially, the account receivable expert prepares an Account Receivable Declaration for you. This statement includes: you will certainly get settlements, all accounts payable details, as well as a summary of just how you will collect these settlements. The Account Receivable Declaration can have written documents, such as those in a bank vault or your own internal financial records. The balance due expert prepares this Declaration for you on a prompt basis.
Account payers are responsible for collecting the payments from their consumers. Once the consumer has actually approved the repayment, the account payer have to submit an "Account Receivable Request" to the company where you bought the debt. The demand will have to have details regarding the funds you owe, the amount owed, as well as what action you will certainly take when the customer pays.
Once the "balance due request" has actually been obtained by the company from which you acquired the credit report, your receivable professional launches a contact us to the business. The company will certainly have an accurate count of the outstanding billing( s) from the customer. When a check has actually been provided and also paid, the "account payer" is alerted as well as can begin paying the consumer directly.
This activity covers two primary activities. First, the company must submit the "Billing" electronically, in the clear, and also accompanied by the proper settlement authorization as well as release kinds.
The account payable expert will get in the best transaction routing number on the "thing number" entrance. After being approved and also cleared by the supplier, the business needs to send out a digital "Earnings Launch" letter to the vendor, which will certainly inform the vendor that the client has given permission for the amount of the billing and also payment.
Once the "earnings launch" letter has actually been sent to the vendor, the company must send out a digital "Acceptance/Release of Payment" letter to the account payer. This letter, when received, should be complied with by a notification that the "receivable cycle is full."
The task entails processing the billings obtained from the supplier and also including them to your accounts payable cycle. The account payer is accountable for sending an "Account Examine" to the supplier or to the bank that issued the funds. Once the checks have been obtained, the vendor or financial institution will certainly after that provide a letter to the client which, upon invoice, will contain the invoice information and the bank transmitting number.
In general, there are 2 different kinds of accounts payable cycles: Solitary cycle and also Double cycle. The single cycle is when the account receivable professional sends out an "Account Examine" straight to the supplier, as well as the supplier will certainly forward the account to the bank.
The double cycle is when the firm sends out an "Account Inspect" to the bank forwards the check to the vendor. A dual cycle can either remain in someday or one week. It is very important to know which kind of cycle your company drops under so that you can avoid duplicated work or reduce the amount of time it takes to close accounts payable cycles.
The accounts payable cycle is one of one of the most crucial as well as valuable elements of accountancy as well as money. If you are not doing the correct bookkeeping and also accounts payable cycle every single time a billing is provided, you can end up sustaining significant costs in addition to a loss of revenue.
Accounts Payable are normally their very own department in a bigger organisation however in smaller sized firms accounts payable and receivable jobs are typically incorporated. While the dimension of business undoubtedly determines the responsibility accounts payable plays, AP satisfies at the very least 3 basic features together with paying expenditures. Larger organisations or businesses that need a group to take a trip might have their AP division manage their traveling costs.
Counting on the controls of a company, account payable might procedures demands as well as disperses funds to cover traveling expenses. After an organisation traveling has in fact taken place, AP would certainly after that be responsible for working out funds distributed versus funds truly invested or for refining taking a trip repayment requests. Accounts Payable is answerable for distributing internal payment payments, controlling and also carrying out minor cash and also controlling the circulation of sales tax responsibility exemption certifications.
Tiny prices such as assorted shipping, out-of-pocket office supplies or company conference lunch are looked after as petty money. AP normally takes care of a supply of sales tax obligation exemption certificates provided to managers to guarantee certifying business acquisitions do not include sales tax commitment expense. Accounts Payable arranges as well as preserves vendor contact details, negotiation terms in addition to Irs W-9 info either by hand or using a computer system data source.
The AP department similarly takes care of end-of-month aging evaluation reports that lets management just how much the solution presently owes. The accounts payable department also works to reduce costs by acknowledging details as well as establishing approaches to save a company cash. A circumstance is if a billing generates income within a discount price duration that lots of vendors offer.
Strong service collaborations in between both can profit the company as well as also a vendor could provide loosened up debt terms. The accounts payable division will definitely have a collection of therapies to stick to prior to making a provider payment. Establish standards are essential due to the worth and quantity of acquisitions throughout any type of sort of time period.
Payables are normally categorized as Trade Payables, payables for the acquisition of physical products that are videotaped in Stock, and likewise Price Payables, payables for the acquisition of goods or remedies that are expensed. Common circumstances of Price Payables are advertising and marketing, traveling, entertainment, workplace items in addition to utilities. AP is a form of credit history that distributors provide to their customers by allowing them to spend for a thing or solution after it has actually currently been obtained.