Accounts Payable - John M. Leask II CPA/ABV, CVA

Accounts Payable & Other Liabilities

Warning Signs:

    • Decrease in cost of goods sold to payables.
    • Lost cash discounts.
    • Significant increase in trade payables.

Steps to Improve:

  • Negotiate well: payment terms, storage, price, shipment.
  • Use supplier capital, extended terms; sell on consignment.
  • Take advantage of prompt payment discounts.
  • Take advantage of favorable purchase discounts; otherwise pay net 45 days.
  • Pay bills when they’re due, but not beforehand.
  • Pay on original invoices not statements to avoid double payments.

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