Accounts Payable is the mirror of AR. Done well, AP funds your operations cheaply; done badly, you damage supplier relationships and pay penalties or premium pricing. The fundamentals are simple but require discipline.
What you'll learn
→ The AP aging report → Approval workflow → Payment cycles → Discount capture and supplier relationshipsThe AP aging report
Mirror of AR: total payables bucketed by how overdue (current, 1-30, 31-60, 61-90, 91+). Run weekly. Show finance and procurement. The aim is normally to keep nothing in 31+ days unless intentionally negotiated.
Watch the relationship between days payable outstanding (DPO) and your suppliers' payment terms. If contractual is 30 days and DPO is 45 days, you are stretching by 15, silently or explicitly. Either negotiate the new terms or pay on time.
Approval workflow
Three-way matching: invoice, purchase order, and goods receipt note must agree before payment. Without this discipline, you pay for goods you did not receive, items you did not order, or quantities short of expectations.
Approval limits: who can authorise what value. AED 5K to a manager, AED 25K to a director, AED 100K to the CFO, AED 500K to the board. Document and enforce, finance is the gatekeeper. Acowntant has built-in approval routing; spreadsheet-based businesses use email trails.
Payment cycles
Run a weekly payment run: review approved invoices, check cash balance, prioritise critical suppliers (rent, utilities, payroll-adjacent), confirm bank balance covers the run. A regular cycle is more efficient than ad-hoc payments and reduces transaction costs.
Consider supplier payment portals (Mashreq Pay-Out, Ripple, etc.) for high-volume operators, bulk uploads beat individual transfers. WPS-style consolidation for multiple suppliers is increasingly common.
Discount capture and supplier relationships
Track early payment discount opportunities and take them when cash allows, they are usually high-yield (e.g., 2/10 net 30 = ~36% annualised). Build a supplier scorecard: payment performance, dispute rate, response time. Use it to renegotiate terms.
Suppliers value predictability over speed. A reliable 30-day payer beats an erratic 21-day payer. If you build a reputation for timely payment, you can ask for better terms, longer credit, and priority allocation when stock is short.
This guide is general information, not professional advice. For situations that involve specific facts, talk to your accountant, or hire one of ours from the marketplace.