Accounts Payable Operations – Options for Improvement: Part 2

By NE Docs | September 22, 2016

Accounts Payable Operations

Have you considered that vendor invoices and other payment request documentation is not just about the paper? In some cases, the details added to an invoice by employees, both in and outside of Accounts Payable, could be more critical than the document itself. After all, a copy of an invoice could always be requested from the vendor if necessary, right?

Does your company have guidelines for adding details to a vendor invoice?

Account Coding details

• In most cases, copies of invoices not related to a Purchase Order may need to be sent to the ordering party so account coding can be added so Accounts Payable can process the invoice into the system or ERP. Once Accounts Payable receives the invoice back, should they identify an issue with the coding supplied, the invoice copy may need to be sent back out again to request a correction. What is the turnaround time between sending out and receiving back? What is the impact of this delay to your financial records?

At a later date, it might be realized the account coding string supplied was not the correct one for the goods or services billed or that Accounts Payable may have keyed the wrong details. In this case, the invoice may need to be pulled from files by Accounts Payable so the coding can be verified or the person who supplied it identified. The account coding charged could also trigger a sales tax or other type of audit.

• Who Supplied the Coding or the Approvals?

Reference to the person supplying any details or taking any action should also be added to an invoice. Does your company have guidelines on how to properly present names? Initials or full signature? Does name of approver also need to be printed out? How does Accounts Payable verify the initials or signatures? Or is any validation done at all? It may not happen often but there are times a researcher or auditor, internal or external, may need to identify, and then speak to the person who supplied details. How easy would this task be in your company? Especially if needed years after the action but still within the document retention period.

Also, is it required that the person supply the date that they applied details? If not, reconsider this. A date trail can help identify root causes for delayed processing or payment.

• What does your company require for details on an invoice that has exceptions or is being disputed? Simply approving an exception or dispute may not be enough. For audit or other research purposes, justification is needed. If an exception invoice requires modification or discussion with the vendor, are the details supplied on or attached to the invoice and sent back to Accounts Payable to become part of the permanent record?

Has your company considered these questions and comments in managing the details related to vendor invoices? How much time are the employees spending when sending out invoices requesting details or taking the necessary actions?

Creating procedures on how to supply coding, approval or exception handling details can be time-consuming but once created, and enforced, the amount of time related to the tasks of collecting the required data and approvals should be greatly reduced.

Another option is to implement an Accounts Payable Automation solution.

An Accounts Payable Automation tool would not only streamline related coding and approval of Non PO invoices or supply a standard format for the routing then reporting of exception invoice resolution but would also help you manage the documentation.

Additional Benefits:

• Non PO invoices could be automatically routed for coding and approval.
• Validation of coding details and approval rights.
• Audit trails become part of the invoice record.
• Automatic matching of PO invoices to the PO and related goods receipts.
• Users become self-sufficient – could access invoices and collected details directly

Implementing an automated solution would also allow Accounts Payable to focus on other tasks.

Want more help? Just ask!

New England Document Systems has the solutions, experience and resources to assist you with anything from creating and implementing Accounts Payable Data Guidelines to automating your Accounts Payable processing. All your company needs to do now is contact us to discuss just how much improvement you want to see in your Accounts Payable operation.

This article is part of New England Document Systems’ partnership with industry experts. This contribution was written by Anne Wheeler of CS Process Flows, LLC. Anne is a Consultant and Project Manager specializing in Accounts Payable processes and systems.

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