Accounts payable services
in the Philippines
Accounts payable services for startups and SMEs in the Philippines
A clear view of your cashflow position:
Accounts Payable Service - The Process
Here's How Our Accounts Payable Management Service Adds Value For Businesses in the Philippines
What is Accounts Payable Management?
The term or concept of Accounts Payable, often referred to as AP, relates to a company’s short-term debts, or, the obligations of a company to pay outstanding payments to vendors, suppliers, and creditors. In essence, it is monies or funds that are due or are falling due for payment by a company to a third party but which have not yet been paid by the company.
Accounts Payable Management is the process by which a company develops, monitors, and adheres to a streamlined system for anticipating payments falling due, making payments by the due date, and monitoring cash flow to ensure the company has sufficient bank funds. It also involves planning and forecasting payments due for future weeks and months.
Accounts Payable Management will be a key consideration for a large majority of businesses. In short, if you are running and growing a business, you are likely to have Accounts Payable considerations at some point in your growth journey.
The fact is that when the bills from suppliers or vendors are falling due, they will have to be paid by the business. An Accounts Payable Management service can help your business understand what payments are due and what payments will soon be falling due so founders, owners, and managers will never be caught off-guard by unexpected bills or payments!
An Accounts Payable service will enable management to understand what payments are falling due. The remote accountants involved in the accounts payable service can also determine when these payments are falling due and whether your business has enough cash in the bank to make these payments.
A Process-Driven Accounts Payable Service
There are various types of payments and disbursements that a business might encounter on a daily, weekly, or monthly basis. This might include petty cash expenses, third-party service fees, BIR tax payments, payroll, consultant fees, Government contributions payments (e.g. SSS, HDMF, PhilHealth), short-term loan repayments/interest, membership fees, corporate registrations (e.g. SEC, BIR, IPO, etc.), dividend payments and many more. It is more than good practice to have a system in place that captures all payments due and falling due so you are assured that payments are paid on a timely basis.
CloudCfo develops and implements systems and controls specifically for our clients’ accounts payable function. We help ensure that our clients’ processing of payments and disbursements is efficient, streamlined, and automated so your own management team can have more informed planning and decision-making.
One of the things that our team does is to establish vendor qualification processes. We record bills and invoices when they arrive and we also monitor pending bills. If you have upcoming payables, we set up weekly alerts for them. We identify and collect payment-related compliance documentation and advise on the best practices for your internal approval process for payments.
Finally, we ensure that your outsourced accounts payable function “speaks” to the other parts of your accounting and finance department so that company management can get a real and complete picture of the financial health of their business.
Compliance and Accounts Payable in the Philippines
Accounts Payable can be a complex process in the Philippines. This is due to the various tax and documentary requirements that apply to business payments in the Philippines. For example, payments to vendors, suppliers, and consultants will often require the application of withholding tax, or Expanded Withholding Tax. This in turn requires the preparation and delivery of a Withholding Tax Certificate, known as BIR Form 2307. The company must then seek and obtain an Official Receipt or Sales Invoice from the third party for the company’s own internal tax compliance requirements. When you add in the application of input VAT – the compliance requirements on payments can really add up.
Under our outsourced accounts payable service, we will help your team to identify the various tax implications of payments to all different categories of vendors and suppliers. We will also put in place processes that help ensure that the specific documents and information needed are in adherence to the PH compliance framework on payments.
CloudCfo’s outsourced accounts payable management service includes optimization of your internal approval process for invoices and bills payment. With our team’s knowledge and expertise working across various industries and business models, we identify and employ the best practices when it comes to an efficient system for payments and disbursement for your business.
The Objective for Accounts Payable Management
There are a number of objectives aligned with our outsourced accounts payable management service.
Firstly, we ensure that you will never have to pay interest fees or penalties for late or delayed payments. Your remote team of accountants is always aware of the bills that are due for payment and what bills are falling due. Our processes are designed with timeliness as a key consideration always.
We also make sure that all payments and disbursements from your business align fully with the local Philippine tax and compliance framework. As the local tax and compliance framework is complex, our team of accounts payable managers will help you navigate your way safely through all your business transactions.
Finally, we want to ensure that, at all times, your management team has a crystal clear picture of the financial status of your business. Without a well-managed and monitored accounts payable function, this will be a real challenge. We strongly believe that the process of identifying and understanding what money is leaving the business and how this affects cash flow should be a real value-added activity for every business.