When you AP is behind the 8-ball you need some simple steps to free up time:
- close off accounts payable on the last working day of the month
- limit budget holders’ accruals to material amounts only e.g. no accrual JV for less than $____, no one item on the accrual for less than $____
- cease receiving paper based invoices – insist that all invoices that need to be paid be emailed to accountspayable @_________ from the supplier.
- stop reconciling supplier statements and trust you own system.
- have all invoices below a certain amount paid by a purchase card – it costs too much to pay one off small invoices
- ring up your top ten suppliers and ask them to send you an electronic file, each week containing all invoices that week, with references to delivery date, order number , services /products delivered etc. This is the start of an electronic interchange.
- perform frequent direct credit payment runs, better practice is to do these daily (this does not mean you are paying earlier as you still stipulate the future payment date).
- Stop multiple stationery invoices – arrange for one supplier invoice per month per site and have stationery consignment stock on ebvery floor
- for all utility invoices (power, telecommunications) ask for a consolidated invoices from suppliers especially invoiced on a new cycle, e.g. invoice cycle including transactions from 26th May to 25th June and being received by the 28th of the month.
- With the free time undertake more investigation work into accounts payable fraud
To understand more look at 50+ Ways To Improve Accounts Payable – Toolkit (70 page Whitepaper + e-templates)