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How to pay vendors and contractors on time

Paying vendors on time means capturing every bill when it arrives, getting it approved, paying it before the due date and recording the payment in your books. Accounting software tracks bills and what you owe, payroll software can pay contractors alongside employees, and dedicated bill pay tools add approval steps and scheduled payments. Collect contractors' payment and tax details before the first payment, and ask your accountant what reporting applies where you operate.

By Bill Belcamino · Page updated September 19, 2026 · Our methodologyResearched and fact-checked by the HelpCompare team

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How to pay bills and vendors on time, step by step

Send all bills to one place, such as a shared bills inbox, instead of to individual inboxes.
Enter each bill in your accounting software with its due date as soon as it arrives.
Get approval from the person who ordered the goods or work before anything is paid.
Collect each vendor's and contractor's payment and tax details before the first payment.
Pay approved bills on a regular payment day, ahead of their due dates.
Mark each bill paid in your books and keep the payment confirmation.

Why it matters

QuickBooks 2026: 74% of businesses lack fully automated bill-pay and 42% delayed payments to contractors, suppliers or vendors. Source

The software this job takes

Which categories a job needs is Editorial assessment; the tools, prices and dates are Verified data.

Prices are each vendor’s published entry plan, recorded from its own pricing page and dated. The example column prices a team of 10: only per-user prices are multiplied; flat and per-account prices are shown as published. Change the team size in the finder.

You need this

Small Business Accounting Software

Accounting software sends invoices, records payments and expenses, and keeps the books your accountant needs.

Tool	Entry price (as published)	Billing unit	Example: team of 10	Free plan	Verified
QuickBooks	From $38/mo	Per account per month (Simple Start)	$38/moFlat per account per month (Simple Start); includes 1 login, so more logins need a higher plan or extra users	YesYes — 1 user, 2 invoices/month, 1 bank connection	Sep 12, 2026Vendor pricing
Xero	From $25/mo	Per account per month, no per-user fees	$25/moFlat per account per month, no per-user fees	NoNo permanent free plan — free trial available	Sep 18, 2026Vendor pricing
FreshBooks	$23/mo (Lite, 5 billable clients)	Per account per month; extra team members $11/month each	$23/moFlat per account per month; extra team members $11/month each	NoNo free plan — 30-day free trial, no card required	Sep 18, 2026Vendor pricing

Compare all Accounting Software pricing →Head to head:Xero vs FreshBooks QuickBooks vs Xero QuickBooks vs FreshBooks6 switching guides Build a decision brief for these →

Often added

Payroll & HR Software

Payroll software pays people, files payroll taxes and keeps employee records.

Tool	Entry price (as published)	Billing unit	Example: team of 10	Free plan	Verified
Gusto	From $49/mo + $6/person	Per person	$109/mo$49 + $6 × 10 people	NoNo — free account setup, no contracts	Sep 17, 2026Vendor pricing
Rippling	Custom quote only	Quote only	Price not publishedQuote only	NoNo	Sep 17, 2026Vendor pricing

Compare all Payroll & HR pricing →Head to head:Gusto vs Rippling2 switching guides Build a decision brief for these →

Often added

Online Payment Processing

A payment processor lets customers pay by card or online and moves the money to your bank.

Tool	Entry price (as published)	Billing unit	Example: team of 10	Free plan	Verified
Stripe	2.9% + 30¢	Per transaction	Per transactionNo monthly fee on this plan; the vendor charges per transaction	No monthly fee	Jul 29, 2026Vendor pricing
PayPal	3.49% + 49¢	Per transaction	Per transactionNo monthly fee on this plan; the vendor charges per transaction	No monthly fee	Jul 29, 2026Vendor pricing

Compare all Payment Processing pricing →Head to head:Stripe vs PayPal2 switching guides Build a decision brief for these →

Not covered on HelpCompare yet

This job usually also needs accounts payable / bill pay. We don’t track that category yet, so we have no verified prices to show for it. We would rather say so than guess. The guidance on this page still covers what to look for.

What to look for

Editorial assessment

Bills with due dates A list of unpaid bills sorted by due date shows what has to go out this week and stops late fees before they happen.
Approval steps If more than one person orders things, look for a way to route bills to the right approver before payment.
Paying contractors If you pay contractors regularly, see whether your payroll tool can pay them and keep their records next to your employees'.
Controls on bank detail changes Fake requests to change a vendor's bank details are a known fraud. Look for a second check before new payment details are saved.
Payments that sync to your books Each payment should mark its bill paid in your accounting software without anyone retyping it.
Contractor payment records Check what records the tool keeps of payments to each contractor, since you may need them for year-end reporting.

Common mistakes to avoid

Paying straight from email Paying a bill from an email without logging it first leads to missed bills and double payments.
Changing bank details on request Never update a vendor's bank details on the strength of an email alone. Confirm by phone using a number you already had.
Guessing how to classify contractors How contractors are classified and reported comes with rules that vary by location. Check with your accountant before you set up how you pay them.
No one owns the payment run When paying bills is everyone's job it becomes no one's. Name one person to run payments and one to approve them.

What to settle before you buy

Who can approve bills, and above what amount does a second person need to sign off?
Who is allowed to add or change vendor bank details?
How many contractors do you pay, and how often?
Which bank accounts do payments come from, and which accounting software must they sync with?
Do you pay any vendors abroad or in other currencies?

Ready to take it to whoever signs off?Turn your shortlist into a one-page decision brief with verified prices, or price the whole job for your team size.

Build a decision brief Open the finder

Frequently asked questions

How do I pay contractors?

Collect the contractor's payment and tax details before the first payment, then pay by bank transfer or through payroll software that supports contractors. Record every payment in your books. Reporting rules for contractor payments vary, so ask your accountant what applies where you operate.

How do I pay vendors?

Log each bill in your accounting software when it arrives, get it approved, then pay it before the due date and mark it paid. A regular payment day keeps this from turning into a scramble.

What is accounts payable automation?

It is software that captures bills, routes them for approval, schedules payment and records it in your books without retyping. Accounting software covers part of this, and dedicated bill pay tools focus on approvals and scheduled payments. To see the software this job takes, open the finder for this job.

How do I pay vendors in my accounting software?

Enter the bill against the vendor, then record the payment when you make it, either through the software if it can pay bills or from your bank, and match it to the bill. Your accounting tool's help pages give its exact steps.

How we built this page

We start from the job, not the product. The phrasings people search for this job (for example “how to pay contractors”) come from our research into how small and mid-size teams describe it. Which software categories the job takes is our editorial judgment. Every tool, entry price, billing unit and date comes from HelpCompare’s open dataset, recorded from each vendor’s own pricing page; nothing is estimated, and where a vendor publishes no price we say so. We take no affiliate commissions and publish no scores of our own. See our methodology or download the data from Open Data.

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How to pay vendors and contractors on time

How to pay bills and vendors on time, step by step

The software this job takes

Small Business Accounting Software

Payroll & HR Software

Online Payment Processing

Not covered on HelpCompare yet

What to look for

Common mistakes to avoid

What to settle before you buy

Frequently asked questions

How do I pay contractors?

How do I pay vendors?

What is accounts payable automation?

How do I pay vendors in my accounting software?

How we built this page

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Bill Belcamino