[Webinar] Little Mistakes that Cause Big Problems in Accounts Payable
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Transcript of [Webinar] Little Mistakes that Cause Big Problems in Accounts Payable
Little Mistakes that Cause Big
Problems in Accounts Payable
Mary Schaeffer
Publisher & Editorial Director AP Now
Author The Controllers’ & CFOs’ Guide to
Accounts Payable + 15 other business books
Agenda
Introduction
Those Processing Bungles that Can Cost Dearly
Mistakes that Will Make Crooks Lives a Little Easier
Those Housekeeping Items that Are So Easy to Ignore
Mistakes that Will Get You in Regulatory Hot Water
Other – Stuff that Didn’t Fit Elsewhere
Closing Thoughts
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 2
Introduction
Not everyone will have every problems (hopefully)
The breakdowns are arbitrary
Automation definitely helps solve some of these problems
We’ve asterisked (*) those where automation will help
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 3
Those Processing Bungles that
Can Cost Dearly
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 4
Processing: Part 1
Not developing a rigid coding standard for invoice entry and
insisting processors use it *
Not focusing on invoice number when entering data *
Not training new processors – especially about credits
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 5
Processing: Part 2
Processing Check requests without backup
If you do after-the-fact POs, giving them the invoice to
create the PO
Not getting 100% policy compliance on T&E *
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 6
Processing: Part 3
Promote without cutting removing system access associated
with previous position *
Not setting up a separate fax for incoming invoices – better
e-fax
Using a rubber stamp to sign checks
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 7
Mistakes that Make Crooks’
Lives a Little Easier
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 8
Fraud: Part 1
Not cancelling credit cards (p-cards and T&E) when an
employee departs
Returning checks to requisitioners *
Not having a separate computer for online banking - ONLY
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 9
Fraud: Part 2
Thinking none of your employees would ever steal from you
and allowing weak internal controls as a result
Not insisting anyone associated with the payment function
take at least 5 consecutive days off
Not getting 100% policy compliance on T&E *
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 10
Fraud: Part 3
Not taking proper fraud precautions *
Not keeping up on the latest information about new frauds;
crooks are regularly developing new “approaches” to get their
hands on your money
Not talking to your bank regularly about its new fraud
prevention/detection tools
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 11
Those Housekeeping Items that
Are So Easy to Ignore
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 12
Housekeeping: Part 1
Never cleansing the master vendor file and deactivating
inactive vendors *
Not periodically updating the contacts in your master vendor
file
Not reviewing the standard payment terms shown in the
master vendor file *
No one will complain if you pay them early
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 13
Housekeeping: Part 2
Not following up on open credits quickly
They have a way of evaporating
Not reviewing your system defaults for all aspects of the
accounts payable function *
Especially important if your business does not follow
“traditional” business patterns
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 14
Mistakes that Will Get You in
Regulatory Hot Water
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 15
Regulatory: Part 1
Not tracking receipt of W-9 *
Not using IRS TIN Matching
Paying small IRS fines and penalties
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 16
Regulatory: Part 2
Writing off un-cashed checks to miscellaneous income
Reporting and remitting unclaimed property to the wrong
state
Claiming money from missingmoney.com when not
complying with unclaimed property laws
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 17
Regulatory: Part 3
Adding sales tax when paying an invoice that doesn’t show it
Paying sales tax to the wrong state
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 18
Other – Stuff that Didn’t Fit
Elsewhere
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 19
Other: Part 1
Not regularly reviewing unapplied payments *
Usually from a Rush check request
Not periodically reviewing and closing open receivers *
Not necessarily an AP job
Document, document, document
Not periodically reviewing and closing open Pos *
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 20
Other: Part 2
Not planning for your future
It’s your responsibility
Not keeping up to date on the latest developments affecting
your job and career
Not learning one or more new skills each year
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 21
Closing Thoughts
Do you have your work cut out for you?
Have you noticed how many of these problems could have
been eliminated through automation?
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 22
Presented by:
Peter Bepler
President & Co-Founder
Anybill
The benefits of AP Automation
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 23
The Case for AP Automation Fast Facts
› $15.70 – average cost to process an invoice
› 17.7 days– average time to process an invoice
› 14% - average number of invoices with errors
› $12 billion – average dollar amount financial
institutions lose to payment fraud annually
Anybill 2010, All Rights Reserved Not For Distribution
The Case for AP Automation Why Automate?
› Improve visibility, efficiency and control with AP automation
› Process invoices more efficiently using web-based software
› Identify and eliminate bottlenecks and delays that lead to overdue, missed or
duplicate payments
› View expenses in real-time to manage
cash flow
› Control spending with workflow and
approval features
› Gain access to historical
data with robust, on-demand
reporting
Anybill 2010, All Rights Reserved Not For Distribution
The Case for AP Automation The Impact
Time To Process Payables
No Automatic Validation
Lack of Visibility
& Transparency
High Processing Costs
› Delays Posting Expenses
› Poor Use of Working Capital
› Damaged Supplier Relationships
› Overpayments and Duplicate
Payments due to Billing Errors
› Difficulties Budgeting, Planning,
Forecasting
› Lack of Control
› Higher Audit Risk
› Difficulty Responding to Vendor
Inquiries
D
› Drains Internal Resources
› Waste of Operating Capital
Anybill 2010, All Rights Reserved Not For Distribution
Thank you/Questions
Questions always welcome.
To share your thoughts and insights
Mary Schaeffer
302 836 0540
Sign up for our free weekly ezine at
www.ap-now.com/ezinesignup.html
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 27
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]
© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer 28