Accounts Payable Services in India

 Account payable Outsourcing is basically the money that a business or a company owes to its suppliers that features as a liability in the balance sheet of the company.

Accounts payable are the accumulated amount that meets the company’s obligation to pay the creditors and suppliers for the goods and services purchased on the credit instead of giving them the direct money. The company who purchase on credit must have to agree that the payment will be made on specific time-period to avoid any future chaos arises on payment default. Any default in payment may lead to the imposition of penalties or additional interest payments.

Accounts payable are also called the short-term debt payment and also displayed as the liability by the company that owes the payment form others.  It is shown under the “current liability” in the company’s accounting books.

Importance of Accounts Payable in the company

We do follow the accounts payable outsourcing Services concept in our daily life and witness these conditions in our daily routine where accounts payable make it very simple and easy to conduct such things.

For example- the amount we pay in kind of electricity bills, newspaper subscriptions, and post-paid telephone bills are all accounts payable for us as we used the service first and then pay it later. The bills are typically paid at the end of the month and treated as a form of credit extended to us from the service providers and thus make us liable for payment towards the services we have already enjoyed.

For a company, who builds their plans to obtain goods and services from its suppliers and vendors on the concept of credit holds a faith in their accounts that the payment towards the goods or service made on credit will be paid as per the agreement that is made as per the agreement between the two parties. The agreement has a certain clause in it like on the type of payment, the mode of payment the credit time period up to which the payment is to be made and the penalty imposed on the payee in case of any default.

A company dealing in goods and services on credit may receive the payment invoice from the supplier or creditor and show the outstanding amount of accounts payable in its accounts payable sub-ledger account.

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