AP Overview PDF/PPT Accounts Payable

1. ©Chartered Technofunctional Institute
Overview of Accounts Payable
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Learn the concept of
Accounts Payable Process
and its role in any
automated accounting
package including ERP’s.
Understand the key
functional areas of Accounts
Payable.

2. Accounts Payable Definition
• Accounts payable is the amount owed for the purchase
of goods or services at a specific date. It is the money
that a company owes to vendors for products and
services purchased on credit extended in the normal
course of business.
• As a general practice suppliers offer to their customers
credit, which is an payment arrangement to pay for a
product or service after it has already been received.
• Accounts Payable is presented as Current Liabilities
under the Liability section of the Balance Sheet. It
represents a negative cash flow for the company.
Accounts payable are often referred to as "payables".
• Accounts Payable is considered as Current Liability,
meaning that it is a short term credit extended to the
business expected to be fulfilled in less than a year.
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3. Define Accounts Payable
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UTILIY COMPANIES
Provides
Services
Accounts
Payable
For
Customer
Makes Payment
Raises Invoices

4. Accounts Payable Description
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Accounting Entry
Sub Ledger
Process
Department

5. Accounts Payable Journal Entry
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When Goods Are Received:
Dr Inventory Account A/c
Cr Accounts Payables A/c
When Payment is Made:
Dr Accounts Payable A/c
Cr Cash/Bank A/c

6. Subsidiary Ledgers – AP Ledger
Imagine what the size of your General Ledger would be if
you have 8000 different suppliers sending you more than
2000 items that you trade in? Subsidiary Ledgers help
manage and store specific information regarding each of
the control accounts in your GL. and Sub Ledger for AP is
called AP Subsidiary Ledger.
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• Manage Suppliers and PaymentsAccounts Payable
• Manage Customers and ReceiptsAccounts Receivable
• Manage Item Prices and MovementsInventory
• Manage Cash and its reconciliation with BankCash Management

7. Receive
Goods
Account Payable Process
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Issue
PO
Inspect
Goods
PO
Match
Enter
Invoice
Receipt
Match
Make
Payment
Release
Payment
Bank
Recon

8. Accounts Payable Department
The business
department that is
responsible for
making payments
owed by the company
to suppliers and other
creditors is also often
referred to as Account
Payable (AP).
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9. TECHNOFUNC
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