Accounts Payable Job Role – Responsibilities, Skills & Career Path
What is an Accounts Payable Job? This role involves managing outgoing payments, verifying invoices, handling vendors, and maintaining accurate records. In this article, we explain key responsibilities and skills needed for the AP role.
Accounts Payable Made Simple: A Friendly Guide
Hey there! If you’ve ever wondered what keeps the money flowing out of a business in an organized way, you’re in the right place! I’m diving into the world of accounts payable today—something I stumbled into years ago and found super interesting. It’s all about managing the bills a company owes, and trust me, it’s not as scary as it sounds! As I write this on a cozy Tuesday night, 10:50 PM IST, June 24, 2025, I want to share everything I’ve learned with you. Whether you’re curious about what it is, how to get a job in it, or even the nitty-gritty like GST and journal entries, I’ve got you covered. Let’s explore this together!
This guide is packed with simple explanations, personal stories, and practical tips. I’ve broken it down into bite-sized sections so you can follow along easily. Ready? Let’s get started!
What is Accounts Payable?
So, what exactly is accounts payable? Imagine you’re running a small shop, and you buy supplies from a vendor but promise to pay them later. That “I owe you” amount is what we call accounts payable! In bigger terms, it’s the money a business owes to its suppliers, contractors, or anyone it buys goods or services from, but hasn’t paid yet. It’s like a running tab that needs to be tracked carefully.
I remember my first job in an office where I had to handle a stack of invoices. It felt like a puzzle at first, but accounts payable is really just about keeping those promises organized. It’s a key part of a company’s finances, showing up on the balance sheet as a liability until the bills are settled. Pretty cool, right?
Skills Required for Accounts Payable
If you’re thinking of jumping into accounts payable, you’ll need a mix of skills to shine. Over the years, I’ve seen what makes someone great at this job, and it’s not just about numbers! Here’s what I think you should focus on:
- Attention to Detail: You’ll be checking invoices and payments—missing a digit can cause big headaches! I once caught a ₹500 error that saved my team a lot of trouble.
- Math Skills: Basic addition, subtraction, and understanding percentages come in handy for calculations.
- Organization: Keeping track of deadlines and documents is key. I use a color-coded folder system that works like a charm!
- Communication: You’ll talk to vendors or colleagues to sort out issues. I’ve had to call suppliers to clarify bills more times than I can count!
- Tech Savvy: Software like Tally, QuickBooks, or SAP is common. I learned SAP on the job, and it made everything so much faster.
- Problem-Solving: When payments don’t match invoices, you’ll need to figure it out. I love the challenge of finding solutions!
Knowledge Needed: Accounts Payable, GST, and TDS
To do accounts payable well, you need some specific know-how. Let me break it down based on what I’ve picked up over time.
Understanding Accounts Payable
At its core, accounts payable is about recording and paying debts. You’ll deal with invoices, verify them, and ensure payments go out on time. I learned that keeping a ledger helps track everything—old-school but effective!
Goods and Services Tax (GST)
GST is a tax on goods and services, and it affects accounts payable big time. When you get an invoice, it might include GST (e.g., 18% in India). You need to:
- Check the GST number of the supplier.
- Record the GST amount separately—it’s something you can claim as input tax credit if your company is registered.
- Ensure the invoice has all GST details (like HSN codes for goods).
My Experience: Once, I missed a GST mismatch on an invoice, and it delayed our credit claim. Double-checking saved me after that!
Tax Deducted at Source (TDS)
TDS is tax you deduct from payments to vendors if required by law (e.g., under Section 194C for contractors). You:
- Deduct a percentage (like 1% or 2%) before paying.
- Deposit it with the government and issue a TDS certificate.
- Keep records for audits.
Story Time: I once forgot to deduct TDS on a ₹50,000 payment, and my boss gently reminded me. Now, I always check the TDS rules first!
Step-by-Step Process of Accounts Payable
Handling accounts payable is like following a recipe—do it step by step, and you’ll get it right. Here’s how I do it, based on my years in the field:
- Receive Invoices: Vendors send bills via email or post. I sort them into a “to-do” pile.
- Verify Details: Check the amount, GST, and purchase order match. I once found a duplicate invoice this way!
- Record in Ledger: Enter it into accounting software or a manual ledger with date, vendor, and amount.
- Approve Payment: My manager reviews it. This step avoids mistakes—I’ve seen approvals catch errors!
- Process Payment: Pay via bank transfer or cheque, deducting TDS if needed. I love the satisfaction of hitting “send”!
- Reconcile Accounts: Match payments with records to ensure everything balances. It’s like balancing my own checkbook!
- File Documents: Keep invoices and proofs for future reference. I use a digital folder now—much easier!
How to Get a Job in Accounts Payable
Want to break into accounts payable? I started with a small role and worked my way up—here’s how you can too!
- Get Basic Education: A degree in commerce, accounting, or even a diploma helps. I studied B.Com, and it gave me a solid base.
- Learn Software: Master Tally, QuickBooks, or ERP systems. I took an online course that boosted my resume.
- Gain Experience: Start with internships or entry-level jobs. My first gig was data entry, and it led me here!
- Certifications: Consider CPA or CMA— they’re gold stars on your CV. I’m thinking of trying one soon!
- Network: Connect with people in finance on LinkedIn. I got a referral that way!
- Apply Smart: Look for jobs on portals like Naukri or company websites. Tailor your resume—I landed my job with a good cover letter.
Topics to Prepare for Accounts Payable
Before you jump into a job, brush up on these topics. I wish someone had told me this earlier!
- Basic Accounting: Understand debits, credits, and ledgers. It’s the foundation I built on.
- GST Rules: Know rates, input credit, and compliance. I study updates monthly now.
- TDS Provisions: Learn which payments need deductions. My TDS mistake taught me that!
- Invoice Management: How to verify and process them. Practice with sample invoices.
- Payment Terms: Understand 30/60/90-day cycles. I negotiate these with vendors sometimes.
- Software Tools: Get hands-on with Tally or SAP. I practiced with a trial version.
Journal Entries for Accounts Payable (With Examples)
Journal entries might sound fancy, but they’re just a way to record transactions. I’ll explain each one simply with examples from my work.
1. When You Receive Goods on Credit
This is when you get supplies but promise to pay later.
- Debit: Office Supplies ₹10,000 (because it’s an asset)
- Credit: Accounts Payable ₹10,000 (because it’s a liability)
What It Means: We got the stationery (asset up), and we owe money (liability up).
2. When You Pay the Supplier
Time to settle the bill!
- Debit: Accounts Payable ₹10,000 (liability goes down)
- Credit: Cash ₹10,000 (cash goes down)
What It Means: We cleared the debt, so the liability drops, and our cash decreases.
3. When GST is Involved
If the invoice includes GST, you record it separately.
- Debit: Purchases ₹10,000 (cost of goods)
- Debit: Input GST ₹1,800 (tax we can claim back)
- Credit: Accounts Payable ₹11,800 (total owed)
What It Means: We record the purchase and GST, owing the full amount.
4. When Paying with TDS Deduction
If TDS applies, you deduct it before paying.
- Debit: Accounts Payable ₹50,000 (full amount owed)
- Credit: Cash ₹49,500 (amount paid)
- Credit: TDS Payable ₹500 (tax to deposit)
What It Means: We paid less cash due to TDS, which we’ll send to the government later.
Wrapping It Up
Well, there you have it—accounts payable demystified! I’ve loved sharing my journey with you, from my early days of sorting invoices to handling GST and TDS like a pro. It’s a job that keeps you on your toes, but with the right skills and knowledge, you can rock it. Start by learning the basics, practice with software, and don’t shy away from asking questions—I sure did!
If you’re aiming for a job, polish your resume, network a bit, and dive into those journal entries. The process might seem long, but it’s rewarding when you see a company’s finances running smoothly. Got questions? Drop a comment, and let’s chat! Until next time, happy accounting!
Check These Out:
- ICA India: www.ica.edu
- QuickBooks Learning: quickbooks.intuit.com
👉 Also read: TDS Section 192 Explained with Example
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