Accounting is a very interesting subject and there are many concepts and facts which a good accountant should be aware of. Accountants study financial statements and suggest improvisations to managers in management accounting. The concept of accounts payable is very common, yet has significant importance when it comes to judging the fundamentals of a company.
Meaning of Accounts Payable
Accounts payable is a term which is used to describe the debt or amount which a company owes to its creditors. They are unpaid dues to the creditor and suppliers. Since this is money borrowed by the company to run its operations smoothly, the accounts payable will always be placed on the liabilities side of the balance sheet of a company. Accounts receivable would have the money which the company expects to get from its debtors. Managers of the firm have to make provisions for clearing these balance payments as soon as possible, to protect the reputation of the company and win the confidence of creditors. Failure to do so can affect the company's prospects of securing loans in the future to a great extent. Clearing it requires systematic planning and also good execution as per the set plan. So, if you set a target of clearing 10-15% of your debts in a period of four months, you need to achieve it practically, to avoid mounting debt. High debt means more interest outgo, and this will naturally cause net profit margins to go down, thereby affecting overall profitability. Without sufficient profit, the functioning of any business can come to a standstill. So, bookkeeping and accounting professionals will have to think over this phenomenon seriously. There are experienced processionals who are assigned to look after this department. Understanding their individual functions will help us to know accounts payable well.
Job of Accounts Payable Professionals
Accounts payable clerks are those who look into the details of the money which is to be returned to the creditors. A record of the business debt is kept by these professionals and they also make use of the latest accounting software to deliver performance as per expectations. On the other hand, there are the accounts payable managers who supervise the transactions of the accounts and finance department and ensure that the debt repayment does not get delayed and the process ends smoothly. These managers are in touch with the creditors and inform them about the financial position and business situation of the company.
Let us know the salaries for these clerks and managers. The clerks can earn anywhere between $30,000 to $42,000 per year depending on their experience and qualifications. To earn more than $40,000 per year, you need to have at least eight years of experience in the field of finance and accounting and have fair knowledge of the accountant duties. The managers can earn anywhere between $35,000 to $65,000 per year, depending on their experience and type of employer. Those employed by private firms earn the most.
Hopefully, after reading this article, you have understood what accounts payable is and the tasks of people working in this field. Accounting jobs can give you a lot of money and prestige and so you should sincerely try to get them. Good luck!
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