8 Accounts Payable Tips And Tricks for Small Businesses

1. Batch your payments

Most SMBs don’t need to send out payments every day unless they’re in accounting or bookkeeping. Our brains aren’t built to switch quickly between tasks, so jumping between them wastes time. And time is one of the scarcest resources for any small business owner.

So, as long as you’re organized about it, you can set specific dates—say, the first and 15th day of each month—to handle all your outgoing payments in one sitting.

While you’re handling all your payments on specific dates, you still want to avoid paying too soon and depleting your cash flow. Using a payments platform like Melio to manage your AP, you can maintain your concentrated payment dates to maximize efficiency, while scheduling the payments in advance to ensure they leave your account at the best possible time for you, not a minute early.

2. File invoices right away

This may sound like we’re contradicting ourselves, but filing and paying invoices are two completely different things.

It’s important to handle any invoice you receive right away to make sure it doesn’t fall through the cracks. Whether that means sending it over to the person responsible for AP or adding it to the pipeline for the next payment date yourself, don’t be tempted to just put it aside until it’s due.

That’s a surefire way to forget all about it until you get that angry call from your vendor letting you know you missed a payment and made irreparable damage to your relationship.

Luckily, this is another aspect of AP that can be done more easily when using a digital tool. With Melio, you and your vendors can send invoices to a unique email address. Once an invoice is received it is automatically added to Melio as a bill, complete with all the relevant information.

3. Set up payment approval workflows

Whether your payments are done manually or digitally you still need oversight and control over the money coming out of your account. Whether you want to supervise it personally or delegate to someone else on your team, it’s important to have a clear payment approval process.

A payment approval workflow protects your cash by controlling who can send payments and which transactions need sign-off from higher up.

For example, you can decide that certain members of your team are allowed to send payments under $300 without additional approval while others need to get a green light for transactions as low as $150. You should also decide who needs to approve each payment, whether it’s the CEO or a direct manager. Payments to a new vendor or a new account for an existing one, always require further scrutiny, so be sure to set up a rule for such scenarios as well.

Incorporating AR and AP automation tools helps enforce these approval rules consistently and reduces human error in AP and AR accounting processes.

4. Be mindful of fraud attempts

Fraud is more common than most owners expect. Organizations lose about 5% of revenue to fraud each year, according to the ACFE (Association of Certified Fraud Examiners), and small businesses are prime targets.

Small businesses are a prime target for fraudsters as they’re usually less aware of the risks and have fewer resources to fight against them. Still, even with limited resources, there’s a lot you can do to protect your SMB from fraud.

When it comes to accounts payable, even just by double-checking that the information on the invoice matches your records and asking the vendor directly whenever you’re in doubt, you can significantly limit your exposure.

5. Negotiate and re-negotiate

Better payment terms give you more flexibility, making it easier to handle your AP. But, most vendors won’t volunteer to improve existing terms or offer a new customer favorable terms unless they are asked.

So, it’s time to pick up that phone and call up your vendors to:

• Ask for more time. Instead of net-30, ask if they can live with a net-60 or 90 arrangement.
• Request bulk concessions. If you’re a big customer or are able to accommodate large stocks of nonperishables, your vendor may be able to give you a special price.
• Check about early bird discounts. If you’re able to pay early, this could mean a lot to your vendors and their cash flow. They may even be able to reward you for it with exclusive deals.

This 10-minute call could prove invaluable to your business, so we really recommend you take the time and pluck up the nerve to do it. The worst that could happen is you get a no. Nobody will stop working with you because you politely brought up the terms of your agreement.

6. Go digital

Paper invoices, checks, and other manual AP processes are messy and prone to error. Yet, many businesses still use them to handle payments.

Businesses stick with manual AP for a few reasons:

• Cost: they assume manual is cheaper.
• Control: they feel manual gives them more oversight.
• Vendor habits: their vendors only accept checks.

Using accounts payable software for small business can replace messy manual processes and give you better control over payments.

Switching to a digital payment platform like Melio to manage your AP online helps:

• Slash time wasted on manual processes so you and your team can focus on generating revenue.
• Automate recurring payments such as rent and utilities so you don’t have to do them over and over again.
• Minimize human error, such as typos, that can be costly and time-consuming to correct.
• Track every payment from one place to ensure no bill is left unattended.
• Cut costs on labor, physical items (such as checks, envelopes, and printer ink) bank fees, and services including postage and delivery.
• Reduce your carbon footprint by going paperless.

Understanding what are online payments can help you see how digital tools consolidate different methods—like ACH, wire, and card—into one streamlined workflow. Some platforms even use AI in accounts payable to automatically capture invoice data, flag errors, and speed up processing.

7. Centralize your payments

Try to use a single bank account to pay all your business bills. This will make it much easier to keep track of all your business payments and make sure you correctly file each of them in your books.

Whatever you do, never mix your personal and business finances as this can have ramifications on your legal requirements, liability, credit scores, and taxes.

8. Pay with a credit card (your vendor doesn’t have to know)

If you have bills that are due soon but your cash flow cannot support them at the moment, consider paying with a credit card. This way, the money is sent to your vendor right away and they get instant confirmation, while you only need to cough up the cash on your next billing cycle. This could mean as much as 60 days of additional breathing room until you get a cash infusion.

Paying with a card also means collecting cashback, miles, and points on business transactions that are typically larger yet go unrewarded.

And, if you use Melio to manage your AP, you can choose to pay with your credit card even if your vendor doesn’t accept cards. They’ll just get a paper check in the mail or an ACH bank transfer, whichever they prefer, and you won’t have to worry about it.

What are the golden rules of accounts payable?

Pay accurate, approved invoices on time, keep clear records, separate who approves payments from who sends them, and never mix personal and business money.

What is the best KPI for accounts payable?

Days payable outstanding (DPO) is the most useful single metric. It shows how well you balance paying on time with holding onto cash.

What are some accounts payable best practices?

Batch your payments, file invoices right away, set approval workflows, watch for fraud, negotiate terms, go digital, and centralize payments in one account.