The accounts payable subledger is similar to that used to track
accounts receivable. The difference is that accounts payable occur
when you purchase inventory or other assets on credit from a
supplier.
It is important to track accounts payable in a timely manner to
ensure that you know how much you owe each supplier and when
payment is due. Many a good supplier relationship has been damaged
due to a sloppy accounts payable system. Also, if your suppliers
offer discounts for payment within 10 days of invoice, a good
automated accounts payable system will alert you when to pay to
maximize the discounts earned.
Excerpted from Start Your Own Business: The Only Start-Up
Book You'll Ever Need, by Rieva Lesonsky and the Staff of
Entrepreneur Magazine, © 1998 Entrepreneur Press
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