don’t forget to use naming conventions.
by roman h. kepczyk
quantum of paperless
processing accounts payable is another of the manually intensive processes within the firm’s administrative department that can be significantly streamlined through digital processes.
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consider how many “touches” a single payable creates: receipt of the invoice, timing of payment in a folder, writing the check and attaching the stub, sending it to an owner for signature, filing a copy of check with backup in its own folder, and stuffing, sealing and sending the check to the vendor. now imagine doing this a hundred times per month, every month. imagine the volume of physical accounts payable vendor files both onsite and in storage, that can be eliminated by storing these images digitally.
according to the cpafma 2017 survey, 47 percent of firms utilize credit cards and other electronic means to pay the majority of their invoices.
the very simple solution is to pay as many recurring vendors as possible via a dedicated credit card and have them send you invoices via email. this credit card would be in the name of the owner signing the payables, but that owner would not get to use that card. only the accounts payable person would have access to charge on this account so they can contact all vendors and put charges on automatic payment. when an invoice is emailed to the accounts payable person, they would enter the amount into the firm’s accounting system on the date the item would be charged and save the invoice in a digital folder. by using a naming convention that would include the date of the entry and the vendor, the invoice would be easily accessible on the network (as well as being backed up).
when it is time to pay the credit card bill, the firm’s controller will reconcile the account, review any questionable items onscreen and then deliver the reconciled credit card statement to the owner for signature. a single payment can be made in lieu of all the individual checks. many firms schedule large payments to hit after the credit card statement cutoff date to maximize the credit float and all of them use credit cards that earn “affinity” benefits. while airline miles and points were popular in the past, most firms are opting for maximum cash rebates, so the payables credit card is viewed as a firm discount program.
for those vendors that will not accept credit card payments, the process can still be automated digitally. most banks have digital bill payment systems. bill.com is a web-based vendor that will route invoices electronically for approval and deliver the check through mail or electronic transfer for the firm for a cost that is less than the firm’s manual handling, envelopes and postage. productivity improves when firms eliminate redundant manual processes.
recommended actions:
- acquire firm accounts payable credit card with maximum cash rebate.
- transition all possible payables to automatic or managed charges.