Accounts Reconciliation Blog

I once worked for a medium sized company that was managed a coffee shop chain. There were only very few employees. There was the marketing division composed of three people, the sales people, the baristas and the finance people. Since our division was right beside the accounting department, I learned a few things about accounts payable payment terms. It was much more complicated than I thought.

I first thought that accounting was a simple procedure. We bought the beans, the napkins, the paper cups and the equipment and we paid them. It turns out that our company like most companies had accounts payable payment terms. The products and supplies were delivered and billed but payments were done much later. I asked the accountant why we couldn’t pay them as soon as they were delivered. She said the finance officer managed the flow of funds in the company, sometimes the company’s funds are made to earn a few interest first before it is used for payment.