Accounts Payable Workflow

Accounts payable feels like the easy side of bookkeeping — bills arrive, you pay them. Then a duplicate payment slips through, an email arrives "updating" a supplier's bank details that did not really come from them, and the BAS claims GST credits on bills from a supplier who was never registered for GST. Payables goes wrong quietly, and it takes cash with it.

A workflow that actually holds up

• Capture everything in the same place. A dedicated bills email address, feeding a tool like Hubdoc or Dext, extracts the details and creates draft bills in Xero or MYOB with the source document attached. No more invoices trapped in someone's inbox.
• Check before you approve. Confirm the ABN on ABN Lookup, confirm the supplier is actually registered for GST if they are charging it, and confirm it is a genuine tax invoice — because your GST credit depends on it.
• Separate entering from approving. Even in a tiny team, the person who enters a bill should not be the only person who approves its payment.
• Pay in scheduled runs. A weekly batch payment run, driven by due dates in the software, replaces ad-hoc payments from email attachments — which is exactly where duplicates come from.
• Reconcile supplier statements monthly. Statements catch missing bills, duplicates, and credits you forgot you were owed.

Australian specifics worth knowing

If a supplier does not quote an ABN, you may be required to withhold from the payment at the top rate before paying them — check the current ATO figure and rules before the payment goes out, not after. And if you operate in building and construction, cleaning, courier or road freight, IT, or security services, payments to contractors may need to be reported on a Taxable Payments Annual Report, due by 28th August each year. Payables data that is clean all year makes that lodgement a non-event.

What we commonly see go wrong

• Bank detail change fraud. An email arrives from a known supplier's address with "new account details". Always verify by phoning a number you already have on file — never the number in the email. This scam succeeds against small businesses constantly.
• Duplicate payments. The invoice is paid straight from the email, then paid again when it appears in the software. A disciplined payment run prevents it, and the software flags duplicate invoice numbers — but only if bills actually go through it.
• Paying from statements instead of invoices, which double-pays anything already settled.
• Claiming GST credits without a valid tax invoice, which surfaces exactly when you least want it to.

A worked example

As an illustration: a building subcontractor pays bills whenever they arrive, from whichever inbox they land in. A supplier's invoice arrives by email and gets paid, then arrives again by post and gets paid again. Nobody notices for months because there is no supplier statement reconciliation. Moving to a weekly payment run, with all bills captured in the software first, makes a repeat far less likely — the duplicate is flagged the moment it is entered.

When to get help

If you cannot say who approved a payment, whether a supplier's GST is legitimate, or whether the TPAR applies to you, the workflow needs attention before the volume grows. Tightening payables is among the quickest wins we see in small business files.

What do I do if a supplier will not provide an ABN?

You may need to withhold an amount from the payment at the top rate and pay it to the ATO — check the current ATO figure and the exceptions (such as a genuine written statement that the supply is private or a hobby) before paying.

How do I protect against invoice fraud and changed bank details?

Treat every bank detail change as suspicious. Verify by calling the supplier on a phone number you already hold — never a number or link supplied in the email requesting the change.

Does the Taxable Payments Annual Report (TPAR) apply to my business?

It applies to businesses in building and construction, cleaning, courier and road freight, IT, and security services that pay contractors, with lodgement due by 28th August. If you operate in these industries, keep contractor payment details clean through the year.