Facebook-Tracking-Pixel
Limited Time Offer! Schedule your FREE business coaching session and scale your business smarter & easier! Reserve My Spot

Success! Your account information has been updated.

close icon

Accounts Payable Defined

This article features an excerpt from Clay Clark, US Small Business Entrepreneur of the Year, speaking about accounts payable on Thrive15.com, one of the top business schools in Florida!

Caleb Taylor:             All right Clay, let's talk about accounting, financial planning and specifically let's go ahead and define the accounts payable because I can't think of anything that I'd rather do with you.

Clay Clark:                 I could think of some things.

Caleb Taylor:             Well, I don't care because I'm leading this.

Clay Clark:                 We'll take it outside.

Caleb Taylor:             I'm leading this right now.

Clay Clark:                  We'll take it outside.

Caleb Taylor:             We're doing accounts payable. Accounts payable.

Clay Clark:                  We'll work through it.

Caleb Taylor:             Here we go. The definition that we have for accounts payable are the amounts that your business owes.

                                    For example, unpaid utility bills and purchases your business has made on a credit card that would be included in this accounts payable.

Clay Clark:                  Yup. Hypothetically, a lot of people watching this, they own a business or you want to own a business.

Caleb Taylor:             Right.

Clay Clark:                  According to the Small Business Administration 13% of our population is self employed.

Caleb Taylor:             Wow.

Clay Clark:                  Why am I telling you that? Well, over 90% of all jobs that have been created over the past 10 years, over 90, nine out of 10 jobs that have been created in the past 10 years are created by small business owners.

                                    In small business ownership, guess what exists? Usually a husband and a women. They're a wife, husband and wife. It's a team. They're working together.

                                    What happens is, the husband, let's say he's out spending like he's a drunk sailor.

Caleb Taylor:             Yeah.

Clay Clark:                  He's just like, "I'll buy it. I'll get it. Let's buy it. I'll go get it, just wait." He's going to the state fair and the guy's selling those glasses and those rotisserie knives. He's like I'll just get it. I'll buy it.

Caleb Taylor:             Those are tempting sometimes.

Clay Clark:                  He puts it on a credit card.

Caleb Taylor:             Oh.

Clay Clark:                  Now he has next month, in about 30 days he will have a big bill that comes due.

Caleb Taylor:             Right.

Clay Clark:                  Now his wife is going, "Well, I probably shouldn't, but I think the company needs a new couch, for the office." Really though. Or the company needs new business cards.

Caleb Taylor:             Right, right, right.

Clay Clark:                  The company needs auto rack, so she calls him. It goes directly to voice mail because he's just like, "I'll just buy as much stuff at the fair as I can get. You guys are great friends. Let's do this."

                                    He's trying to buy stuff at the fair.

Caleb Taylor:             Right.

Enjoying this quick excerpt from one of the best business schools in Florida? You can learn accounting, accounts payable, marketing, branding, and more from business leaders, mentors, and everyday entrepreneruial success stories on Thrive15.com!

Clay Clark:                  Sir Drunks-A-Lot. He's drinking, he's buying stuff at the fair. She's over here trying to dutifully go, "Well I think we have ..." She looks at the bank account and says we have $10,000 in our account. I guess I could go ahead and buy these business cards and this auto rack.

                                    She buys ...

Caleb Taylor:             I see what's happening.

Clay Clark:                  He is buying. All of a sudden the two bills meet at the end of the month and boom, quickly we discover accounts payable.

Caleb Taylor:             Right.

Clay Clark:                  What has to happen is one person, one person needs to be responsible for all expenses.

Caleb Taylor:             Not two.

Clay Clark:                  One person. One person.

Caleb Taylor:             OK.

Clay Clark:                  If you go into a business, you're going to find there's a Chief Operating Officer in big business, a Chief Operating Officer. A cheap, or a Chief ...

Caleb Taylor:             Not cheap?

Clay Clark:                  Well, cheap would be good too.

Caleb Taylor:             OK.

Clay Clark:                  A Chief Financial Officer. A Financial Officer, that's his whole job to run the financial side. There's a Chief Executive Officer. What I'm saying is those people have specific roles and you have to know your specific role.

                                    In a small business because it's a lot of these husbands and wives, mom and pop shops.

Caleb Taylor:             Right.

Clay Clark:                  You've heard mom and pop shops. The mom and the pop maybe don't talk about things sometimes.

Caleb Taylor:             Accounts receivable.

Clay Clark:                  Yeah, they don't. They're having dinner and they're like, "Hey, what are we having for dinner? Did you buy anything at the fair?"

Caleb Taylor:             Right, right.

Clay Clark:                  "No, I didn't buy anything at the fair." That's what happens and it gets crazy.

Caleb Taylor:             That's what we're doing here, right? Whether it's accounts receivable, accounts payable. Any of these different accounting terms that you might not know, you just type it in here on Thrive15.com and we'll define it with these five minutes and as you saw here, we give you the action steps.

                                    Your action step is that you've got to have one person overseeing all the finances so there's no confusion.

Clay Clark:                  Liz is our basically controller right now and so Liz tell me, she says, "Hey, I just want you to know we have an invoice that came due for this person. Do you want me to pay this or that?" It all goes through Liz.

Caleb Taylor:             Right.

Clay Clark:                  It's not because Liz is a financial genius. It's because she's honest and she has high integrity. Now, here's the thing, the person who's in charge of your finances needs to be the honest, high integrity person.

Caleb Taylor:             Right.

Clay Clark:                  Liz couldn't even formulate the words needed to lie. She just has unbelievable, impeccable integrity, that's why we have her there.

Caleb Taylor:             Right.

Clay Clark:                  You can't train that. You can train the numbers and the accounting, the actual typing in the data, but you can't train ... Put one person in charge who has impeccable, unquestionable integrity.

Caleb Taylor:             Good. What do I do? Is there a way if I feel like I've fallen behind? Do I just start tomorrow?

Clay Clark:                  Well, here's real talk. This is probably not something that you wan to hear, but I'm going to tell it to you. Credit card companies don't want to hear this, so this segment ends up being sponsored by MasterCard or something, I apologize.

                                    Credit cards companies cannot collect debt from you, so don't pay your credit cards. If you're way behind, just don't pay your credit cards. I'd pay my minimum balance so I don't hurt my credit score, but I mean, just don't pay them.

                                    They can't take anything. Now your house, they can foreclose on your house. A credit card company can just yell at you and lower your credit score.

Caleb Taylor:             This is the ...

Clay Clark:                  If you're in a totally bad end of times scenario, just pay the very minimum balance on your credit card or transfer funds, get a brand new credit card on creditcards.com and transfer funds from one card to the next.

                                    I know one guy who lasted almost three years just transferring cards to cards until he had enough cash to pay it off.

                                    Or if you're in a total end times and you cannot afford the minimum balance, just don't pay the credit cards.

Caleb Taylor:             This is the advice that you will not find many other places, but it's real. This is why we go to you for advice. You're a real person. You've been through these difficult times and you've made it where you are now and we want to help you get there too.

Clay Clark:                  I want to say this real quick. A lot of people are like "Are you a financial planner? Are you an accountant?" No, I'm better than one because I'm actually an entrepreneur who's done this.

Caleb Taylor:             Right.

Clay Clark:                  If you've dealt with this, there's an accountant that's probably watching this right now and we have some ones on our Thrive team that they will feel maybe financially that I shouldn't tell someone not to pay their credit cards because I'm an accountant. I'm a professional.

                                    I'm just talking about, if you're watching this and you're way behind ...

Caleb Taylor:             End times.

Clay Clark:                  ... you're in a bad situation, pay that mortgage please because they can take your car, they can take your house, they can't take anything away from you if you don't pay your credit cards.

Caleb Taylor:             There you go. Thank you, Clay. I appreciate it.

Clay Clark:                  You're the man.

Caleb Taylor:             You are.

Start FREE TrialI want the answers to my business questions.
Login Try Us for $1
search icon
Stuck? Need Specific Advice? Ask our Mentors any Business Question.

Ready to Thrive? Log In to your Account.

Login with your email
Please enter your email.
Please enter your password.
Login with social accounts
Signup | Forgot password?

Forgot Password?

Send us your email address, and our team of elite minds will get right on it.

Sign up to Thrive15

and get unlimited access to 1,700+ courses
  • Full Access

    Month-to-Month
    $ 49 /mo
    Try it free
    • World-class mentorship
    • 24/7 access to all videos
    • Practical business tools
  • save $98 on an annual membership

    Annual

    Year-to-Year
    $ 41 /mo
    Save $98!
    Try it free
    *Billed as one payment of $490.
    • World-class mentorship
    • 24/7 access to all videos
    • Practical business tools
  • Thrive15 group memberships

    Team Membership

    Need to train five or more people?
    Learn More
Graduation Cap Icon College student? Sign up for $19/month. Learn More

Contact Us

Give us a call or send us an email and we will be in touch as soon as possible, or sooner than as soon as possible.

Email: info@thrive15.com
Phone: 918-340-6978
Prefer communication by smoke signals?

Ask us a question!

We want to answer you, no strings attached. How can we reach you?

Please enter your name.
Please enter your phone number.
Please enter your message.

Feedback

Let us know what's going on.

Please enter your subject.
Please enter your message.
Even more feedback