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Accounts Payable
Accounts Payable is an account from your General Ledger and Chart of
Accounts. It is also an account that is listed on your Balance Sheet and it is used in accrual basis accounting. This account is an easier way to show the amount of money your company owes others in the short term. It groups all the short-term bills together for reporting purposes. That can be anyone who you owe money to that you expect to pay off in a year or less.
The things that are included in accounts payable are things like your utilities, stores you have credit with, and any bills that come in that you are not paying right away. Generally, accounts payable are bills that are paid monthly. This account is like a holding account for the bills that your company owes. For bills that will take longer than a year to pay off you use liabilities. Things like loans and mortgages are liabilities.
Accounts Receivable
Accounts Receivable is an asset account that is used to show the people or companies that owe your business money. The reason its an asset account is due to the good faith expectation of your company for your client to pay the invoice.
Like accounts payable it is a short term account. This account is used for money
owed to your business that should be paid within a year. Accounts receivable
is like a store or business credit account. For example your company does work for a customer, you create an invoice to send to the customer with the expectation of payment at a future date. Generally the payment happens within 15 to 30 days.
The charges for both sales tax filing and Payroll would increase from 55 an hour to 70 an hour. Mainly due to the need to keep up with all the regulations. It requires more research and time to keep up to date on the regulations. Most businesses that are established already have someone who keeps up with payroll and sales tax if they need to pay sales tax.
