Closing out accounts payable promptly results avoids the occurrence of late fees. By ensuring outstanding debts are paid on time, your business will incur less expenses as your likelihood of late payment assessments decreases. Plus, having a clean balance sheet is attractive for external parties. If your business is seeking a loan or investment partner, ensure the accounts payable is up to date and not a reason for concern.
Paying debts quickly may result in discounted prices. Vendors may offer purchase discounts if payment is made within a specified period. However, this period is typically substantially shorter than when the typical payment is due. For this reason, it is in your best interest to make prompt payments to receive lower prices.