Which supplier bills a guesthouse should pay first
How a guesthouse or restaurant decides which supplier bills to pay this week when cash is tight, supplier by supplier rather than oldest first.
By Achekam · · 4 min read · For Hospitality businesses in South Africa, Nigeria, Kenya
It is Thursday, the bank balance will not cover everything, and the pile of unpaid supplier invoices is taller than it should be. The butcher has called twice. The linen service has sent a polite reminder. The beverage wholesaler has said nothing, which is somehow more worrying. Someone has to decide who gets paid this week and who waits.
In a quiet month that decision comes round every week, and the instinct is to pay the oldest invoice first, or the supplier who shouts loudest. Neither is a plan. This piece offers a better way for a guesthouse, lodge or restaurant to choose, and explains how to record the payments once the choice is made.
Why the oldest invoice is not always first
AccountingTools suggests that, because suppliers' payment terms vary, a payables aging is less useful for timing payments than reviewing supplier invoices supplier by supplier. An invoice that is old may be from a supplier on long terms who is not yet expecting payment; a recent one may be from a supplier who wanted cash on delivery and extended you a favour.
The aging still has a use. AccountingTools notes that both the payables and receivables aging schedules can be used to compile a cash forecast. It tells you the size of the problem; it just does not set the order.
Going supplier by supplier
Take each supplier you owe and ask four questions:
- What are the terms, really? The agreed terms and the date payment is actually due.
- How important are they? Could you trade next week without them?
- Is there an alternative? Another butcher in town, or the only gas supplier who delivers to you?
- What happens if you are late? A reminder, a stopped account, interest, or a call from a lawyer?
Sort the answers into three groups:
| Group | Typical suppliers | This week |
|---|---|---|
| Keep the doors open | Food and beverage suppliers you cannot replace quickly, gas, essential services | Pay what is due, in full if possible |
| Keep the relationship | Regular suppliers with alternatives, laundry, maintenance contracts | Pay part, and call them before they call you |
| Can wait, by agreement | Suppliers on longer terms, non-urgent purchases | Agree a date, in writing |
Taxes and wages sit outside this exercise. They are not supplier bills, and late payment of either brings consequences of its own, so plan for them first and separately.
The risk of stretching a key supplier
ACCA cautions that delaying payments to suppliers can backfire, because a powerful supplier may then demand cash on delivery. It also notes that a new company with no payment track record may be refused credit and required to pay cash on delivery from the start.
For a restaurant, losing credit with its main food supplier is far worse than the problem it was trying to solve: every delivery then needs cash on the day, which is exactly when cash is shortest. So the suppliers you would struggle to replace are the ones you protect, even if their invoices are the newest. If you must be late, phone first, say when you will pay, and then pay on that date.
Paying in parts from the right account
In Achekam a business records supplier bills line by line with VAT. A bill without a purchase order waits for approval before it posts, and a posted bill can be paid in full or in parts from a chosen bank account.
Part payments are the practical tool here. Paying each key supplier part of what is due often keeps every account open, where paying one in full and others nothing closes some of them. Choose the bank account the money actually leaves from, so your bank reconciliation stays straight; if you keep a separate account for an outlet or for wages, do not record a supplier payment against the wrong one.
Look forward, too. Approved purchase orders count as committed spend against budgets per expense account and period, and the budget screen shows budget, spent, committed and available, flagging over-committed lines without blocking a purchase. In a tight week, check committed spend before approving another order: money already promised to suppliers is money you will need soon.
Recording payments when Achekam makes no payment file
Paying a supplier in Achekam only records the payment; no bank payment file is produced for suppliers. The transfer itself is made in your banking app or at the bank. Do the two together:
- make the transfer, then record the payment against the bill with the bank's reference;
- keep the proof of payment with the bill;
- if you agreed a later date with a supplier, note it on the bill so whoever pays next week knows.
A payment recorded but never sent, or sent but never recorded, is one of the commonest reasons a supplier's statement and your books disagree; reconciling a supplier statement shows how to find it. The day-to-day routine for recording food and beverage bills is in paying food and beverage suppliers in parts.
Making next week easier
The weekly scramble eases when it is planned. A cash forecast built from both aging schedules shows the tight weeks before they arrive, and cash planning for the low season works through building one. AccountingTools' explanation of aging schedules covers how payables and receivables agings are prepared and how they feed a cash forecast.
This week, list every supplier you owe, put each into one of the three groups, and phone the ones you will pay late before Friday. Suppliers forgive a call far more readily than silence.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
