Your Accounts Payable Checklist

 
By Karen Wainwright

October 31, 2018

                     

One of the best and easiest ways to keep yourself organized is a basic list. 2019 is almost here and we are thinking about themes to cover more in-depth in future blog posts.

Have you checked any of these items off to ensure your AP department is working to its full potential?

 

Discounting

Customers who negotiate volume discounts or pay by discounts don’t want to lose these valuable savings. They are aware that payments made in advance of the due date will make vendors very happy and improve relationships. They typically look at a software solution that will track and enable this functionality based upon a specific date. It’s critical that the AP department takes the time to investigate if their vendors offer any type of discounting beyond negotiating a better price for the products or services.

How you approach this topic may be dictated by how efficient your invoicing process is. Make sure that they are handled in a timely fashion. Your current cash flow situation may see some improvements if you remember that time is money and if invoices are delayed, discounts may be lost.

Approvals

For most companies, the days of having only one person approve and pay invoices are over. When you approach this issue, how many people should be involved? Do you have stages? How long should this process take? Approvals are top of mind for most customers, because there are a variety of key considerations. To safeguard against fraud, companies will enforce rules that the individual who prints the checks cannot be the one who approves. Sometimes this comes through automation or in some cases, it’s printing an edit list for manual approvals. Please be mindful that if the process takes too long, you might run the risk of losing discounts you worked hard to negotiate.

Fraud Protection

Working with a defined approval process helps, but many AP departments are on the move to electronic payment processing. Certainly, there are the classic tell-tale signs like suspicious addresses, freeware email accounts, multiple payments falling under approval thresholds, but converting your vendors to electronic payments could be one of the best strategies to overcome this threat. Many AP experts also recommend closely monitoring your master vendor file and limiting its access within the company. There should be a separation of duties between who creates it and who makes payments.

Automation

Each AP professional will have their own opinion on what automation means to them. It could be approvals, how batches are created and processed, internal processes, etc., but each company will need to decide how to adopt automation and what level of complexity they will require. Whether you need a siloed approach with approvals, organizing how invoices are processed, managing manual tasks, etc. or if you need an end-to-end solution, there are vendors who can handle a wide variety of scenarios to provide guidance in upgrading your systems.

Education

Most software vendors will provide videos, user guides, classes and other materials to ensure you are well prepared to use their solution to your advantage. It’s always advisable to take advantage of these offerings to build your knowledgebase. Some customers will search the internet for case studies, white papers and other documentation to see what other firms have done to see if they can “borrow” some new ideas. Some customers will include training on these solutions as part of their onboarding process for new AP employees. Always keep your executive engaged so they can give some guidance on how training can contribute to their strategic initiatives.


Contact Mekorma if you would like to gain greater insights to the topics addressed in this blog post. Ask about how Mekorma’s Payment Hub, Multi-Batch Management or Enhanced Electronic Payments service can help.

Next month, we are scheduled to attend the APP2P Fall Conference and Expo in Las Vegas. We promise that what happens in Las Vegas, won’t stay in Las Vegas because we are excited to share our findings from the show in a blog post!