Accounts Payable & Receivable Management: Who Needs It and Who Does Not
Whether Accounts Payable & Receivable Management applies to a given business is the first thing worth settling, and it is where most of the early questions land. The questions below are the ones raised most often in practice; the full scope of the service is on the Accounts Payable & Receivable Management page.
What is the difference between Accounts Payable and Accounts Receivable?
Accounts Payable is what your business owes to others — vendors, suppliers, service providers — for goods or services received on credit. Accounts Receivable is what others owe to your business — customers who have purchased on credit terms. AP is a liability on your balance sheet; AR is an asset. Managing both well is what keeps your cash flow healthy even when your Profit & Loss statement shows a lag between earning revenue and actually receiving cash.
In practice: AR growing faster than sales can be a red flag that collection discipline is slipping even as the top line looks healthy on paper.
How does TDS apply to vendor payments, and why does it matter for AP management?
TDS (Tax Deducted at Source) must be deducted at prescribed rates on specified categories of payment — for example, contractor payments, professional or technical fees, rent, commission or brokerage, and purchase of goods above the notified threshold — before the vendor is paid. These categories were governed by sections such as 194C, 194J, 194-I, 194H, and 194Q of the Income-tax Act, 1961; with the Income Tax Act, 2025 now in force, the underlying deduction obligations continue but section numbering has been reorganised, so we confirm the current corresponding provision at the time of application rather than relying on legacy section references. Correct category-wise application at the point of invoice booking, not as an afterthought, avoids both under-deduction (interest and disallowance risk) and over-deduction (vendor relationship friction).
In practice: The applicable TDS category and rate depend on the nature of payment and, in some cases, vendor-specific factors like PAN availability. We apply this category-wise at invoice booking against the current law in force rather than leaving it to a year-end reconciliation exercise, which is where most errors are discovered too late to fix cleanly.
What is GSTR-2B and why does it matter for accounts payable?
GSTR-2B is an auto-generated, static statement on the GST portal listing input tax credit (ITC) available to a business based on what its vendors have reported in their GST returns. ITC should be claimed in GSTR-3B only to the extent it is reflected and eligible in GSTR-2B. Monthly reconciliation between your purchase register and GSTR-2B identifies vendors who have not reported invoices, ITC eligible but not yet claimed, and ITC claimed in error — before it becomes a department notice.
In practice: We treat GSTR-2B reconciliation as a monthly discipline, not a year-end scramble. Vendors who consistently fail to report invoices on time are flagged for follow-up or, in persistent cases, for reconsideration of the vendor relationship.
How do you handle a customer who consistently pays late?
Our aging-based collection cadence flags accounts as they cross each threshold — a courtesy reminder at the due date, formal follow-up at 15 days overdue, an escalation call or letter at 30 days, and CA-led intervention for balances beyond 60 days, which may include revisiting credit terms, requiring advance payment for future orders, or, where necessary, formal recovery steps. We work with you to decide where the line is between relationship management and firm collection action.
In practice: The right response depends heavily on the customer relationship and your sector's norms — we tailor escalation tone and pace to your business rather than applying one rigid script to every account.
What is a provision for doubtful debts, and when is it required?
A provision for doubtful debts is an accounting estimate that recognises the likelihood that some receivables will not be collected, reducing the reported value of receivables to a more realistic, recoverable amount. Applicable accounting standards require businesses to assess this at each reporting date based on ageing, customer-specific risk, and historical loss experience — it is not optional once objective evidence of impairment exists.
In practice: We flag accounts for provisioning review as part of the year-end close, based on the aging schedule maintained through the year — this avoids a scramble and disagreement with the auditor at year-end.
Does PNPC handle e-invoicing and e-way bill compliance as part of AR management?
Where e-invoicing is applicable to your business under the GST e-invoicing mandate (based on your aggregate turnover threshold as notified by CBIC), we generate invoices in the compliant e-invoice format with IRN (Invoice Reference Number) generation, and coordinate e-way bill generation for goods movement where required, as part of the receivables invoicing process.
In practice: E-invoicing turnover thresholds have been progressively lowered over recent years — we always confirm current applicability to your specific turnover rather than assuming your prior-year exemption still holds.
What controls does PNPC put in place to prevent vendor fraud?
Vendor master changes (particularly bank account detail changes) are verified independently before being updated, invoices are matched against PO/GRN before payment, payment runs require documented approval from an authorised signatory, and unusual patterns (new vendors with immediate large invoices, repeated near-duplicate invoice amounts) are flagged for review rather than processed automatically.
In practice: Vendor bank-detail-change fraud — where a fraudulent email requests an update to a legitimate vendor's bank account — is one of the most common and costly fraud patterns we guard against. Independent verification of any bank detail change is non-negotiable in our process.
Where this sits in the wider engagement
Accounts Payable & Receivable Management rarely arrives on its own. The statutory basis and the current requirements are set out on the Accounts Payable & Receivable Management service page, and the related services are grouped under Accounting Payroll.
What PNPC does
PNPC Global has practised since 1986 across India and the UAE. On Accounts Payable & Receivable Management we take the work end to end — reviewing the facts, preparing and filing what is required, and dealing with the authority through to closure.