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, monitoring cashflow to ensure the company has sufficient bank funds and 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 along the 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, when they are falling due and whether or not the business has enough cash in bank to make these payments! A robust Accounts Payable function is just one building block within the overall accounting and finance function!
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, etc), 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 and provides and ensures that payments are paid on a timely basis.
CloudCfo develops and implements systems and controls specifically for the Accounts Payable function of our clients. As part of our Accounts Payable Management service, we help ensure that the processing of payments and disbursements by our clients is as efficient, streamlined and automated as possible to enable more-informed planning and decision-making by management.
We support with establishing vendor qualification processes. We record bills and invoices when they arrive. We monitor pending bills. We set up weekly alerts for upcoming payables. We identify and collect payment-related compliance documentation. We advise on 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 the 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 the specific documents and information required by the company to ensure adherence to the PH compliance framework on payments is always a key consideration!
Optimization of your internal approval process for paying bills and invoices is another key element of our outsourced Accounts Payable Management service. Based on our Team’s knowledge and expertise working across various industries and business models, we are experts on identifying the best practices when it comes to an efficient system for payments and disbursement from your business!
The Objective for Accounts Payable Management
There are a number objectives aligned with our Outsourced Accounts Payable Management service.
Firstly, we aim to ensure that you never have to pay interest or penalties on late or delayed bill payments. We ensure that your team is always aware of what bills are due for payment and what bills are falling due. Our processes are designed to ensure that timeliness is always a key consideration.
We also aim to ensure that all payments and disbursements from your business align fully with the local Philippine tax and compliance framework. The Philippine tax compliance framework can be complex and with our Accounts Payable Management service, we help you navigate your way safely through all payments and disbursement transactions conducted by your business.
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. In short, our Outsourced Accounts Payable service will give you a much clearer picture of your company’s financials!