Accounts Payable for Small Teams: Aged Payables and the Weekly Run

Somebody in the team forwards a supplier bill to the shared inbox. Three weeks later the supplier calls about it, the founder finds it under forty other emails and pays it that afternoon from the bank app. The books catch up whenever the accountant reconciles the statement. At ten people this works, roughly. At thirty it produces late fees, duplicate payments, contractors who quietly start looking elsewhere, and a monthly P&L that shows costs in the wrong month.

Record the bill when it arrives, not when you pay it

The single habit that fixes most of this is recording every supplier bill on the day it arrives. Not paying it, recording it. The bill goes into the ledger as a payable with its date, due date, supplier and amount. Cash has not moved yet; the P&L shows the cost in the month the service was received; the balance sheet shows what you owe.

This is the difference between cash-basis and accrual bookkeeping, and for a company of 10 to 50 people accrual is not optional. Without it, March looks cheap because the March contractor invoices were paid in April, and April looks terrible for the same reason. Project margins are wrong in both months. And nobody knows the total owed to suppliers without opening the inbox.

Once bills are recorded on arrival, three things become possible: an accurate aged payables report, a weekly payment run that takes twenty minutes, and a cash forecast you can trust for the next six weeks.

The aged payables report

Aged payables lists every unpaid bill, grouped by how far past its due date it is. The standard buckets:

• Current: not yet due.
• 1-30 days: overdue by up to a month. Usually a process slip, occasionally a dispute.
• 31-60 days: the supplier has probably sent a reminder. Relationships start to strain here.
• 61-90 days: expect suspended service, late fees or a firm phone call.
• 90+ days: either a genuine dispute or a sign of cash trouble. Anything here needs a written explanation.

The report answers two questions at once. What do we owe in total, and how much of it is late? A healthy company of this size has most of the total in the current bucket, a little in 1-30 (there is always something), and nothing beyond that except disputed items you can name. If 31-60 is growing month over month, the problem is cash, not administration, and it needs to be treated as such.

Read the report next to aged receivables. If clients owe you EUR 90,000 with EUR 30,000 over 30 days, and you owe suppliers EUR 40,000 with EUR 15,000 over 30 days, your late payables are a symptom of your late receivables. Chase the clients first.

Deciding what to pay this week

A weekly payment run is a fixed slot, say Thursday morning, where one person looks at the aged payables, the bank balance, the next payroll date and the expected client receipts, and decides. The order of priority for a services company is fairly stable:

1. Payroll and payroll taxes. Never at risk, never late.
2. Anything overdue that can stop the business: hosting, domains, software the team works in, office access.
3. Contractors and subcontractors, on their agreed date. Their cash flow is thinner than yours.
4. Bills due within the next seven days.
5. Early-payment discounts, if cash after payroll allows.
6. Everything else on its due date, not before.

Paying early feels tidy but costs liquidity. Paying late costs trust. The run should land bills on their due date, plus or minus the day the bank takes.

Worked example: six bills, one Thursday

A 22-person outsourcing company has EUR 52,000 in the bank on Thursday. Payroll of EUR 31,000 goes out in nine days. A client invoice for EUR 24,000 is due in six days, and this client has paid on time for two years. The aged payables report shows six open bills, in EUR:

The decision this week: pay hosting today (it is overdue and it can stop the business), pay the lease (due in three days), and schedule the contractor for Monday as agreed. That is EUR 10,440, leaving EUR 41,560. Payroll of EUR 31,000 leaves EUR 10,560 before the client receipt, which is thin but covered, and the EUR 24,000 receipt is expected three days before payroll.

The design discount is worth EUR 63. Paying 17 days earlier than the due date to earn 2% is equivalent to an annual return above 40%, which no bank offers. But it comes out of the same cash that must cover payroll. The right call is to schedule it for day 7, the day after the client receipt is expected and still inside the discount window, with a note to cancel if the receipt slips.

The laptop bill is not due for 20 days and goes into next week's run. The legal bill stays unpaid on purpose, with a dated note in the ledger explaining the dispute, so that the 31-60 bucket has an explanation rather than a mystery.

Contractor bills in outstaffing

Outstaffing companies have a particular payables pattern: most of the cost base is contractor bills, one per person per month, and each one maps to a client invoice at a higher rate. The margin is the difference, and it only holds if the hours match.

Before approving a contractor bill, compare its hours to the timesheet hours billed to the client. A contractor who invoices 176 hours when 168 were logged and billed has made a mistake, or the timesheet has. Either way, an unmatched bill costs margin. Tools that keep contractor cost and client bill rate on the same project, such as the outstaffing margin view in TridentERP, make this a glance rather than a spreadsheet exercise.

Two other rules. Pay contractors on the agreed date regardless of whether the client has paid; late client payment is your credit risk, not theirs. And record contractor bills in the month the hours were worked, even if the invoice arrives on the 5th of the next month, so the project P&L for the month is complete.

Drafts from PDFs, posting by people

Most supplier bills arrive as PDFs or photos. Typing them in is slow and error-prone, so it is reasonable to let software read the document and produce a draft: supplier, date, due date, amount, VAT, line items. What is not reasonable is letting the draft post itself to the ledger.

The reasons are practical. OCR misreads a 3 as an 8 often enough to matter. Suppliers send the same invoice twice with slightly different file names. A bill can carry the wrong VAT treatment for your country. And the most expensive failure of all: an email that looks like a real supplier announcing "new bank details". A person who spends thirty seconds comparing the draft to the document and to the previous bill from that supplier catches all of these. Once posted, a bill cannot be edited in a proper ledger; corrections go through a credit note, which is more work than a careful glance beforehand.

FAQ

Should small recurring bills like SaaS subscriptions go through the same process?

Yes, but batch them. Record them monthly from the card statement as bills, so the P&L is complete, and let them stay on auto-pay rather than in the payment run.

What if a bill arrives without a due date?

Use the terms in the contract, or 30 days from the invoice date if there is no contract. Record the assumed date and tell the supplier which date you are working to.

How far ahead should the cash forecast go?

Six weeks is enough to see two payroll dates and every open bill. Beyond that, the accuracy drops and the effort rises.

What to do next

1. Collect every unpaid supplier bill from inboxes and drawers and record it in the ledger with its due date, this week.
2. Run the aged payables report and write a one-line explanation next to everything past 30 days.
3. Book a fixed 30-minute payment run slot each week, with one named owner and a deputy.
4. For every contractor bill, add a step that compares invoiced hours to billed hours before approval.
5. Decide who checks and posts drafted bills, and make sure it is never the same person who set up the supplier's bank details.