[Webinar] AP Productivity: It's All in the Details

Accounts Payable Productivity:

It's All in the Details

Mary Schaeffer

Publisher & Editorial Director AP Now

Author The Controllers’ & CFOs’ Guide to

Accounts Payable + 15 other business books

Agenda

Introduction

The Big Twelve

Closing Thoughts

© 2012 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 2

Introduction

Accounts payable: not a big picture issue

Productivity in the details

Hidden costs – but all with a bottom line impact

Get rid of some of these … and spend more time on value

add tasks!


Mary S. Schaeffer 3

The Big Twelve


Mary S. Schaeffer 4

#1 Don’t Double Down: Correct

Handling of Credit Memos

The problem: processors don’t recognize credit memos

The think they are an invoice

“Pay” the credit memo

Now the vendor owes you twice as much


Mary S. Schaeffer 5

More on Credit Memos

The Escheat Issue

The Miscellaneous Income Issue

The Disappearing Credit Issue


Mary S. Schaeffer 6

The Credit Memo Solution

Train – especially new processors

Retrain - periodically


Mary S. Schaeffer 7

Prospecting for Gold: Finding All

Your Open Credits

Not as easy as you might think

Sometimes used for other charges

Sometimes companies supress open credits on statements

Are they sending credit memos?

If so, where?

Regular statement reviews –

Where are they sending them


Mary S. Schaeffer 8

Finding All Your Credits

Regularly request statements

All activity

All vendors

Unknown credits – often due to volume purchases from different locations

Review and reclaim – quickly

No time/resources – hire a third party to do it for you and LEARN from what they find


Mary S. Schaeffer 9

#3 Keeping Current: Vendor

Contact information

What information do you have?

The TIN Solicitation/Corporate Reporting debacle

The new ACH fraud problem


Mary S. Schaeffer 10

Vendor Contact Data Best

Practices

Make it part of the vendor set up

Update at least annually

Do it yourself

Outsource

Automate as much as possible

Vendor self service portals – and impact on ACH fraud



#4 The Overzealous Vendor:

Duplicate Invoices

New Problem: Make sure they got the invoice

Email it

Then mail it

About 75% have



Solutions to the Sending Invoices

Twice Problem

Identify these

vendors

Ask them to stop

Create an ACT

(Always Check

Thoroughly) List

Beef up duplicate

payment checking

routines © 2012 Accounts Payable Now & Tomorrow and


#5 Unnecessary Expenses: The

Hidden Cost of Paper Checks

Expensive – anywhere from $2 - $10 or more

Prone to errors

Manual work – non value add

The Unclaimed Property Issue

The check lost in the mail

headache



Alternative to Paper Checks

P-card

ACH

Pay from statements

Limited controlled circumstances



#6 The Payment Emergency: Get

the Backup for Rush Payments

Documentation often scanty or non-existent

Three way match often not used

Looser controls

Return to requisitioner issue



Sweeping up after the Elephant: Make

Sure The Rush Doesn’t Create a Problem

Ask for backup

Follow up after the fact and get backup

Identify the associated PO and receiver and cancel them

Keep a file of rush payments and check 30 -60 days later to

make sure the original invoice didn’t show up and get paid



#7 The Sales Tax Dilemma: When

They Don’t Charge

Resist the urge to ignore the issue

At the end of the day, the buyer is responsible for sales and

use tax

Accrue use tax if appropriate – but before you do



The Best Practice Solution: When

They Didn’t Charge Sales Tax

Ask why

Maybe tax wasn’t applicable

Maybe the forgot and they’ll adjust

Maybe they don’t have nexus

If it was included, ask for a revised invoice showing the tax

separated out

If they forgot, ask for a new invoice showing separate amount

Don’t accept an invoice for the tax

You’ll forget when the auditors show up



Worst Practice: The Sales Tax Issue

Just add the tax to the invoice

It will get treated like a credit

You’ll have issues when you are audited as you

weren’t paying use tax

The one place it won’t end up: at the state

Don’t Do It



#8 The Internal Control Issue:

Returning Checks to Requisitioners

Inefficient for AP

Checks sometimes lost

Occasionally fraud

Can lead to duplicate payments



Handling Requests for Returned

Checks

Ask what the business reason is

Don’t make it easy

Create a form, requiring executive approval

Require electronic payments for rush items

Get your auditors involved



#9 The Receipt Conundrum: What

to Do with All Those T&E Receipts

Some employees play games with

receipts

Now almost 60% require all

receipts for expense

reimbursement

Over one-quarter are considering

now asking for detailed meal

receipts



T&E Receipts Best Practice:

Require All Receipts be Submitted

Routinely question

Spot check 5-10% randomly

All known envelope pushers

All C-level execs (assuming management

dictates this)



#10 The Silent Zappers:

Productivity Killers

Not having invoices go to AP first

Petty cash boxes

Not returning invoices addressed inappropriately

Not having strong coding standards for invoices and master vendor file

Invoices addressed to no one

Not using direct deposit for T&E reimbursement

for everyone



#11 Keeping Score: Tracking and

Resolving Discrepant Invoices

Discrepancies – Yuk

Tend to drag on

Without monitoring

Can go on for 30 days or longer

Second invoice sent

Sometimes paid



Discrepant Invoices: Avoiding

the Endless Life Problem

Track so no one forgets

Regular follow up

Make it a policy to resolve before the due date



#12 Where’s the Invoice: The

Visibility Factor

The he said-she said problem with

purchasing

The floating invoice problem

The “Where’s My Money” Calls

The “Did You Get My Invoice” Calls

The “When Are You Going to Pay Me” Calls



Practices to Ensure Complete

Invoice Visibility

Centralized receipt of invoices

Ideally in AP

The polite return of invoices addressed to no one

E-invoicing



How You Can Get Started

Talk to peers

Vendor demos

Ask Anybill

Email: [email protected]

Call: 877-426-9245



Thank you/Questions

Questions always welcome.

To share your thoughts and insights

Mary Schaeffer

[email protected]

302 836 0540

Sign up for our free weekly ezine at

www.ap-now.com/ezinesignup.html



mailto:[email protected]



http://www.ap-now.com/ezinesignup.html



About Mary Schaeffer

Mary Schaeffer is a nationally recognized accounts payable expert. Following a career in finance she turned to writing and consulting. For the last 15 years she has been researching and writing newsletters for the accounts payable profession. Currently she is the Editorial Director & Publisher of Accounts Payable Now & Tomorrow, (www.ap-now.com) a fee-based newsletter published by CRYSTALLUS, Inc.

She also handles most of the firms consulting assignments (focused primarily on AP issues) often working with other well-regarded professionals. Her blog, at http://ap-now.com/blog/ is read by over 15,000 professionals each month.

Ms. Schaeffer is the author of over 15 business books including The CFO and Controllers’ Guide to Accounts Payable and the recently published Fraud in Accounts Payable: How to Prevent It. John Wiley & Sons is the publisher of most of her books.

She also is a regular contributor to the AICPA’s Corporate Finance Insider.

Ms. Schaeffer has a BS in Math from York College (CUNY) and a MBA in Finance from New York University.

She can be reached at [email protected]



http://www.ap-now.com/



http://ap-now.com/blog/






[Webinar] AP Productivity: It's All in the Details

Documents

Transcript of [Webinar] AP Productivity: It's All in the Details