Who pays the bills on accounts payable day when you use an online bookkeeping service? The short answer: your online bookkeeper will update the accounting software, and inform you what bills are due and their amounts. You should continue to be the one signing and sending the checks. Avoid keeping a stack of checks with your online bookkeeper. This way, you’re still in control and have the ability to approve checks before they’re sent off.
Here’s a step-by-step guide of how accounts payable works when you use online bookkeeping services:
01. Create a Recurring Vendor List
This is a list of vendors that you have to pay every single month. Some examples of typical recurring vendors that most small businesses have to pay:
- Monthly building rent/lease
- Insurance monthly premiums
- Lenders (loan payments)
- Monthly subscription services like software systems or training platforms
02. Set Up File Sharing Account
Your online bookkeeping service should give you access to a file sharing software that will allow you to easily and quickly share necessary documents securely. For example, they might ask you to share files using Dropbox, Podio, or Intellinote.
File sharing should take you 15-30 minutes every week. If it’s taking you more than that, you might want to alert your bookkeeper and adjust the system. Make sure to keep your bookkeeper updated with the correct documents by uploading files weekly.
03. Schedule a Weekly “Check Run” Meeting
We suggest meeting weekly with your online bookkeeper to review bills and cut checks for those bills. Monthly is too infrequent, and it’s not as easy to understand your cash position. The meeting should take about 30 minutes.
Check Run Meeting Agenda:
A. Your online bookkeeper should have everything ready for you to review:
- Bills you sent them should be entered correctly into the accounting software.
- Your bank and credit accounts should be completely reconciled.
B. Your outsourced bookkeeper will review with you all of the bills that are due this week, and will give you a total cash requirement to pay them off.
EXAMPLE: "You have $15,000 in your bank account. The bills that are due this week total $2,347. If you pay all of your bills due this week, you'll have $12,654 remaining."
You’ll be able to assess your cash position, credit line, and plan for upcoming expenses such as payroll.
Your bookkeeper will review your entire accounts payable aging report. This report shows you how much you currently owe all your vendors. This is a high-level overview where you should ask your bookkeeper questions if anything looks strange or slightly off.
04. Bookkeeper Prepares Checks. You Sign and Send.
Once you have had your check run meeting with your online bookkeeper, and you have approved payments, your bookkeeper should prepare the checks online using accounting software. Again, we recommend that you keep the check stock at your office for security purposes.
Have your bookkeeper mark the bills as “paid” in the software. As he/she does this, he/she can also mark them as “to be printed.” When you’re ready, you can print them easily and quickly. Since you are still in control of the checks, you are able to review them one more time before you sign and send them out.