Accounts Payable Best Practices

Introduction xi

Chapter 1 Invoices 1

Invoice Handling: Approvals 1

Forwarding Invoices 6

Verifying Invoice Data 8

Invoice-Coding Standards 11

Short-Paying Invoices 16

Paying Small-Dollar Invoices 19

Handling Unidentified Invoices 21

Handling Invoices without Invoice Numbers 23

Case Study: How One Pro Took Accounts Payable Out of the Picture when Resolving Customer Discrepancies 25

Chapter 2 Checks 29

Check Printing 29

Check Signing 35

Check Stock Storage 40

Distribution of Checks 42

Check Fraud 45

Rush or Emergency Checks 50

Case Study: Information Sheet: Segregation of Duties 54

Chapter 3 Operational 57

Duplicate Payment Avoidance 57

Paying When the Original Invoice Is Missing 61

Limiting Calls to Accounts Payable 63

Petty Cash 65

Supplier Statements 69

Case Study: Expert Demonstrates How to Put the Web to Work for Accounts Payable 71

Chapter 4 Master Vendor File 77

Master Vendor File Setup 77

Using Naming Conventions 81

Making Changes to the Master Vendor File 85

Master Vendor File Cleanup 87

Case Study: Experienced Accounts Payable Pro Shares Master Vendor File Control Secrets 90

Chapter 5 P-Cards 97

Design of the P-Card Program 97

Establishing Procedures 99

Setting Controls 101

Increasing Usage 105

1099s and P-Cards 106

Terms 108

Rebates 110

Case Study: P-Cards Improve Accounts Payable Process at PETsMART, Rock-Tenn, and Rouse 111

Chapter 6 Travel and Entertainment 119

Formal Policy 119

Cash Advances 123

T&E Report Form 125

Verifying Data 127

Handling Receipts 129

Reservations 130

Reimbursing Employees 132

Unused Tickets 133

Case Study: Making the Most of Direct Deposit 134

Case Study: TransUnion’s Successful Low-Tech, Low-Budget T&E Solution 136

Case Study: Follow IBM’s Lead: 21 Steps to an Award-Winning T&E Process 139

Case Study: How Zurich America Developed Its Own Electronic T&E Report 145

Chapter 7 Regulatory Issues 151

1099s 151

Sales and Use Tax 154

Unclaimed Property 156

Case Study: How to Avoid Sales and Use Tax Audit Disasters 159

Case Study: A Typical Company’s Unclaimed Property Experience 162

Chapter 8 Cash Management 167

Taking Early Payment Discounts 167

Payment Status Information for Vendors 170

Bank Accounts and Fraud 172

Other Cash Management–Related Initiatives 174

Case Study: General Electric’s Approach to Electronic Invoicing and Payment Processing 176

Chapter 9 Technology 181

Imaging and Workflow 181

The Internet 185

E-Invoicing 187

Case Study: PPL Electric Offers Lessons on Setting Up an Accounts Payable Imaging Solution 189

Case Study: An Accounts Payable Web Site 194

Case Study: How the Accounts Payable Manager at Merck Overhauled Department Procedures and Technology 199

Chapter 10 Communications/Customer Relations 209

Payment Status Information for Vendors 209

Communicating Relevant Information to Vendors 211

Communicating with Internal Customers 214

Improving the Procure-to-Pay Cycle 217

Case Study: Interactive Voice Response Frees Accounts Payable from Annoying “Where’s My Money” Calls 219

Case Study: How Automated Accounts Payable and Purchasing Systems Mesh at BNSF 222

Index 229