The Purchasing and Accounts Payable Process: A Complete Guide for VA Bookkeepers
Most aspiring bookkeepers can record an expense. Very few can explain why that transaction ended up on their desk in the first place.
That gap is what separates a data-entry VA from a bookkeeper a client actually trusts. When you understand the business context behind a transaction, you stop second-guessing yourself — and you stop freezing when a recruiter asks you to walk them through your process.
This guide covers the complete purchasing and accounts payable workflow, from the moment someone in the company says "we need this" all the way to the payment hitting the vendor's account. It's the mirror image of the billing and accounts receivable process, and once you see how the two connect, the whole business starts to make sense.
What Is Purchasing?
Purchasing is exactly what the word says: the process of purchasing or acquiring what a business needs to operate.
The scope is wider than most beginners assume. Purchasing covers:
Inventory — restocking the goods a company sells
Services or contractors — outsourcing projects the in-house team can't handle
Office supplies — everyday operational consumables
Asset acquisition — machinery, furniture and fixtures, equipment, and property
If the company is spending money to bring something in, it falls under purchasing.
What Is Accounts Payable?
Accounts payable has a refreshingly simple definition. It's the process of tracking a company's loans, debts, and other payables — and in many setups, processing payments to the parties the company owes.
When a business buys inventory on credit, or hires a contractor and agrees to pay later, that obligation lands in accounts payable.
Purchasing vs. Accounts Payable: They Are Connected, Not Identical
Here's a distinction that trips people up: a purchase is not automatically a payable.
A purchase can be settled two ways:
Cash — you pay using your bank account or cash on hand. That's a purchase, and it's done.
On account (terms) — you receive the inventory, the service is rendered, or the asset is delivered, but payment comes later. That's still a purchase. It just creates a payable.
Think back to basic accounting entries: purchase inventory on account. The purchase happened. The liability was created at the same moment.
So purchasing and accounts payable are linked — the same way billing is linked to collection. Every internal business process runs as a chain. Understanding where a process starts and where it ends is what gives you real context.
Where Purchasing Actually Starts
Purchasing has a broad scope, but the trigger is always the same: a request or a need.
Let's use a working example. Say the company is Kyle O. Mac Perfect Landscaping LLC.
An employee requests a grass cutter, because there isn't one. Without that equipment, the company can't deliver landscaping services at all. The need creates the request. The request starts the process.
Requests can come from any department — operations, sales, marketing, HR, or accounting. This step is fundamental. Nothing gets purchased that nobody asked for.
A Realistic Scenario
Kyle O. Mac Perfect Landscaping LLC lands a large corporate client: Hatdog LLC.
The problem is that the company has only one employee, and finishing the monthly job requires two more people. But the Hatdog LLC schedule is once a month. Hiring full-time staff for a once-a-month demand isn't practical.
The solution is project-based contractors. So Operations submits a request:
Request: 2 additional manpower to fulfill the landscaping for Hatdog LLC.
That request now enters the procurement process.
The Procurement Process, Step by Step
Procurement is the validation layer. It's the process of determining which service or product is best to purchase for the actual request or need. It's the filter that decides which contractor, which supplier, which product.
If accounting requests paper, procurement decides what kind of paper best serves internal use. Same logic, different scale.
Here's how it flows:
1. Gathering of Need or Request
Collect and consolidate what's being asked for across the company.
2. Cost Estimate and Budget Ceiling
Establish what the company is actually willing to spend. In our example: how much are we willing to pay, per person, per service, once a month?
3. Finalize Scope and Project Description
Define exactly what's being hired or bought. What's included, what isn't, and what qualifications or expertise are required.
4. Broadcast or Posting
Publish the requirement to the market:
We are looking for a subcontractor willing to work once a month. We need two people. Budget is $1,000 per service for landscaping services.
The post carries the scope, the project description, the qualifications, and the expertise required. Some larger companies skip this step entirely because they maintain an onboarded supplier pool.
5. Inquiries and Selection
Applications and bids come in. Selection determines who is most qualified based on your criteria.
In our example, Jake and Mike — brothers who run their own small landscaping outfit — have the right expertise and a solid portfolio. They're willing to work on contract. They're the best fit for this project.
6. Awarding
The work is formally awarded to the selected vendor. This is where purchasing takes over.
The Purchase Order: Who Issues It?
Here's a detail worth memorizing, because it's the exact reverse of what happens in accounts receivable.
In billing and accounts receivable, the client issues you a purchase order.
In purchasing and accounts payable, your company issues the purchase order to the supplier.
Same document, opposite direction. In accounts receivable it's for the customer. In accounts payable it's for the supplier.
The accounting head issues the approved purchase order, and the purchaser relays it to the vendor. In smaller companies, one purchaser often handles the request gathering, the procurement process, and the PO relay all at once.
Once the PO is issued, it means the two contractors are approved to work with the company, once a month, for Hatdog LLC. The PO is the confirmation that they've been hired.
Delivery Validation: The Step People Forget
After the PO is issued, purchasing stands by. The work now moves to Operations.
Operations is responsible for quality checking the work of the contractors. This step is called delivery validation or purchase validation. Its job is simple: confirm that the work was actually performed, or the goods were actually received.
Once Jake and Mike complete the job and Operations approves the quality, the process moves forward. Purchasing issues a confirmation that delivery validation passed — and relays it to accounts payable.
That confirmation is the handoff. It's the moment the transaction becomes yours.
Your Job Starts Here: Processing the Vendor Invoice
The work is done, so the contractor bills the company. The document for that is the invoice.
Purchasing hands you the package:
The purchase order
Proof of delivery
The vendor's invoice
Now you process it. Depending on the arrangement:
Record as payable if the vendor is on terms
Issue a check if it's a post-dated check arrangement
Schedule the transfer if it's a direct deposit
The 3 Payment Methods Every US Bookkeeper Must Know
If you're working as a US bookkeeper, you need to be fluent in three payment methods.
1. ACH
ACH is the scheduled transfer — the closest local equivalent is PesoNet here in the Philippines. You send it today, and it lands after the business day, or on whatever date you schedule.
It's free, but it can't be same-day. ACH typically needs one to three business days to clear.
2. Wire Transfer
Wire transfer is the same-day option — the InstaPay equivalent. Because it's immediate, it carries a fee, which is why accounts payable staff usually avoid it unless it's necessary.
3. Check
Checks carry no transfer charges, which is why they remain common in corporate AP. In the US, checks are typically mailed to the vendor, or occasionally picked up at the client's office.
What About Zelle, Venmo, and CashApp?
You'll hear these mentioned, but corporates don't use them. Zelle, Venmo, and CashApp are for personal use and are not recommended for corporate transactions. That said, if your clients are small businesses, get familiar with them anyway — smaller clients do use them.
The practical takeaway: always note the payment method preference of each supplier.
The Sidestep: Your Vendor Information Tracker
Back up to the procurement process for a moment, because there's a parallel step most tutorials skip.
When you broadcast a requirement, a lot of vendors respond. Many apply. Many bid. All of that bidder information should be captured in a vendor information tracker.
The goal is to know who you're dealing with:
Company name
Email address
Line of products or services
Payment preference
Legalities and credibility
For accounts payable specifically, you want vendors you can get terms with. Corporate transactions are rarely straight cash — they're usually card or terms.
What to Collect for Each Payment Preference
Payment Method Information to Request ACH Routing number and account number Wire transfer Routing number and account number Check Complete mailing address and company name
That last one matters more than it sounds. Since US checks get physically delivered, an incomplete address means a payment that never arrives.
Recording, Scheduling, and the Finance Head
Once you've received and verified everything, you record it in the system. It's now booked as a payable.
From there it moves to the finance head for budgeting and scheduling of payment. In corporate structures, accounts payable is not the one who actually pays the bills — that authority sits with finance.
In smaller companies, though, the AP role often includes scheduling the payment as well. If terms are net 30, you schedule it 30 days from the invoice date. If it's a same-day check arrangement, you write the check. It depends entirely on company policy and the company's capacity to pay.
After payment is processed, you record it as paid — which is what makes your accounts payable aging report accurate.
How to Answer "Walk Me Through Your AP Process" in an Interview
This is the payoff. Once you understand the context, the interview answer writes itself:
The accounts payable process begins in the purchasing department, where they collect the request or need of the company. It then goes through the procurement process, where requests for quotation are sent to suppliers or contractors. Purchasing creates the purchase order draft, and accounting issues the approved purchase order.
After operations confirms that the items were received or the work was delivered by the contractors, we wait for the vendor's invoice. The purchaser sends confirmation to me as accounts payable, handing over the purchase order, proof of delivery, and the invoice from the contractor.
I record it in our accounting software or management system so I can track the invoices I need to process. If I'm the one tasked with scheduling payments, I schedule based on the agreed terms — net 30 means 30 days from the invoice date. If it's a same-day check, I write the check. It depends on company policy and capacity to pay.
Once the payment is processed, I record it as paid so it reflects correctly in the accounts payable aging report.
That's a complete, confident answer — and it's built entirely on understanding the chain, not memorizing steps.
Adapting This to Any Industry
This workflow is intentionally generic, and that's its strength. Whether you end up in logistics, trading, or a service-based company, the process holds. Only the terminology changes.
Learn the chain once, and you can adjust to any client's SOP or workflow variation without panicking. That's the whole point of learning context instead of steps.
Key Takeaways
Purchasing starts with a request or need, not with a payment
The procurement process validates who and what to buy
Your company issues the purchase order to suppliers — the reverse of accounts receivable
Operations performs delivery validation before AP touches anything
AP work begins when the vendor invoice arrives with the PO and proof of delivery
US bookkeepers must know ACH, wire transfer, and check
A vendor information tracker protects you during selection and payment
In corporate setups, the finance head handles budgeting and payment scheduling
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