Managing Bills and Payables

by Mateusz Kuczera

Published April 17, 2023

The day is March 3rd and Ahmed walks into his admin Catherine’s office.

“Good morning, Cath,” he says with a smile. “How are you today?”

“Oh, hi, Ahmed,” she replies while shuffling papers and staring and her computer screen. “I’m good, I’m good.”

“You sure?” he insists.

“Yeah, yeah,” she says. “I just have the feeling that I forgot something and I just can’t figure out what…”

Ahmed smirks and says “Rent?”

“Oh shit!” exclaims Catherine, shifting her gaze towards Ahmed. “How did you know?!”

“Owner called me earlier today. You know,” he continues as he slowly walks further into Catherine’s office, “our problem isn’t that we don’t have the cash. Cash is fine. Our problem is that our stuff is disorganized. If we just could—”

“But there’s just so much paperwork!” interrupts Catherine. “I have so much stuff to do! And all those bills to pay, if only you guys didn’t buy so many things!”

“Cath,” he says slowly. “Let’s take some time this week to talk this through and see what we can improve.”

As soon as Catherine opens her mouth to reply, Ahmed interrupts her with an insistent look to which she responds with silence. Ahmed walks out of her office, says “have a good day Cath. We’ll talk later” and closes the door behind him.

In a small company, ensuring supplier bills are paid does not sound too difficult of a task. And while most companies manage to do it without an issue, late supplier payments tend to be widespread. Managing payables also goes beyond simply paying bills at the right time.

Paying at the Right Time

Paying bills has an immediate impact on the cashflow of the business. It is therefore better to plan bill payments in order to spread this impact over time while of course ensuring payments are made before the payment terms deadline. This doesn’t mean paying bills as late as possible, it only means to pay bills when the time is right and not as soon as possible.

To be able to pay when planned, bills need to be organized. With a system which manages payables, scheduling payments is made very easy. Once scheduled, no reminders are necessary as the payment will be processed when scheduled. Scheduling bills also provides visibility on the cashflow forecast which can then be used to plan further.

Individual Bills Review

When receiving a bill from a supplier, reviewing it for accuracy should be done promptly. If any mistakes are found, contacting the supplier for a correcting should be done quickly as well. If the bill is found to be accurate, payment can be scheduled as chosen. Reviewing bills regularly also allows to have a good understanding of whether some payment re-prioritizing is needed.


When a choice needs to be made as to which bills are to be paid before others, it is recommended to first focus on interest-heavy liabilities than payments with no interest at all. In other words, repaying credit cards and lines of credit should be done before long-term debt and before supplier accounts, all within payment term conditions of course.

Financial Targets

As with receivables, payable targets should be set to know how the business stands with its expenses. Firstly, simple financial targets allow the business leaders to know whether cashflow for a specific period was positive or negative. While a positive cashflow is necessary to maintain the business afloat, temporary negative cashflows are normal so long as they don’t drain all available cash. Other financial indicators as well as their targets are suggested in the table below.

Reviewing Payables

As with receivables, regularly reviewing spending trends based on the targets above will identify any upwards spending trends or bills beyond payment terms. It will also allow the calculation of cashflow when combined with receivables paid.


While managing bills and payables can seems simple on the surface, doing it in a way which optimizes the company’s expenses can significantly help profitability and cashflow. However, without a digital payables tracking system, going beyond the simple “pay bills on time” is quite difficult. Therefore, as with receivables, a digital software solution is necessary to have real-time visibility on payables.

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