Pros and Cons of the Accounts Payable System

I personally am not a fan of using the accounts payable system in Quickbooks. These are the reasons: First, you are having to input information twice. Once when you enter the bill and second when you issue the check. The other problem that happens is that many people start out using the accounts payable system but then when it comes time to record the check they do not go back to the accounts payable system and issue a separate check, creating a duplicate entry. Therefore I will preface the use of the accounts payable system with this; either use it all the time or don’t use it at all as it will create more problems for you. The pros of using the accounts payable system is primarily for budgeting purposes and for prioritizing payments. Once you enter all your bills you can then run a report listing the bills due and choose which ones are more vital to pay immediately.

Next. How to use the accounts payable system.

Information to put on Checks

The information you record on checks is very important for future reference. The more information you put on the check the easier it is to classify what type of expense it is. Some of the problems I have seen when recording checks has to do with not putting enough information on the check. For example, it may seem a time saver to not put the name of a vendor on a check, which you are able to do, but later if you are looking for a particular check by vendor, then you have to review all the checks to find the right one. The same goes for not recording the expense account and using the Miscellaneous Expense account. That account should be rarely used. I often see this account used, maybe if the person is not sure what kind of expense it is and plans to go back and reclassify the check later. It is better to use the account called “Suspense” instead.
The vital information is the date of the check, generally the date you wrote it, the name of the vendor, the amount, and in the memo field, what the expense was for of if there is an invoice number, that is also usually good to note.

Next, the pros and cons of using the Accounts Payable System.
By Alamo Bookkeeping Associates