[Webinar] AP Productivity: It's All in the Details

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While it’s nice to focus on the big-picture issues in accounts payable, at the end of the day, many of the problems that occur do so because proper attention hasn’t been paid to the fine points. Alas, …

While it’s nice to focus on the big-picture issues in accounts payable, at the end of the day, many of the problems that occur do so because proper attention hasn’t been paid to the fine points. Alas, when it comes to accounts payable productivity, it’s all in the details. Without attention to these smaller issues, fraud, erroneous payments can duplicate payments creep in. Not only are there the financial losses associated with these hard dollar excess expenditures, there is the additional salaries for staff to clean up these messes and handle a less than productive process.

In this session, Mary S. Schaeffer lookrf at a dozen less-than-efficient process in place in many organizations. She provided alternative approaches for each – and many don’t cost a red cent to implement. Think your accounts payable department is as productive as possible? Spend an hour with us to make sure. It will be 60 minutes well spent.

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  • 1. Accounts Payable Productivity: Its All in the DetailsMary SchaefferPublisher & Editorial Director AP NowAuthor The Controllers’ & CFOs’ Guide toAccounts Payable + 15 other business books
  • 2. Agenda  Introduction  The Big Twelve  Closing Thoughts © 2012 Accounts Payable Now & Tomorrow and2 Mary S. Schaeffer
  • 3. Introduction  Accounts payable: not a big picture issue  Productivity in the details  Hidden costs – but all with a bottom line impact  Get rid of some of these … and spend more time on value add tasks! © 2012 Accounts Payable Now & Tomorrow and3 Mary S. Schaeffer
  • 4. The Big Twelve © 2012 Accounts Payable Now & Tomorrow and4 Mary S. Schaeffer
  • 5. #1 Don’t Double Down: Correct Handling of Credit Memos  The problem: processors don’t recognize credit memos  The think they are an invoice  “Pay” the credit memo  Now the vendor owes you twice as much © 2012 Accounts Payable Now & Tomorrow and5 Mary S. Schaeffer
  • 6. More on Credit Memos  The Escheat Issue  The Miscellaneous Income Issue  The Disappearing Credit Issue © 2012 Accounts Payable Now & Tomorrow and6 Mary S. Schaeffer
  • 7. The Credit Memo Solution  Train – especially new processors  Retrain - periodically © 2012 Accounts Payable Now & Tomorrow and7 Mary S. Schaeffer
  • 8. Prospecting for Gold: Finding All Your Open Credits  Not as easy as you might think  Sometimes used for other charges  Sometimes companies supress open credits on statements  Are they sending credit memos?  If so, where?  Regular statement reviews –  Where are they sending them © 2012 Accounts Payable Now & Tomorrow and8 Mary S. Schaeffer
  • 9. Finding All Your Credits  Regularly request statements  All activity  All vendors  Unknown credits – often due to volume purchases from different locations  Review and reclaim – quickly  No time/resources – hire a third party to do it for you and LEARN from what they find © 2012 Accounts Payable Now & Tomorrow and9 Mary S. Schaeffer
  • 10. #3 Keeping Current: Vendor Contact information  What information do you have?  The TIN Solicitation/Corporate Reporting debacle  The new ACH fraud problem © 2012 Accounts Payable Now & Tomorrow and10 Mary S. Schaeffer
  • 11. Vendor Contact Data Best Practices  Make it part of the vendor set up  Update at least annually  Do it yourself  Outsource  Automate as much as possible  Vendor self service portals – and impact on ACH fraud © 2012 Accounts Payable Now & Tomorrow and11 Mary S. Schaeffer
  • 12. #4 The Overzealous Vendor: Duplicate Invoices  New Problem: Make sure they got the invoice  Email it  Then mail it  About 75% have © 2012 Accounts Payable Now & Tomorrow and12 Mary S. Schaeffer
  • 13. Solutions to the Sending Invoices Twice Problem  Identify these vendors  Ask them to stop  Create an ACT (Always Check Thoroughly) List  Beef up duplicate payment checking routines © 2012 Accounts Payable Now & Tomorrow and13 Mary S. Schaeffer
  • 14. #5 Unnecessary Expenses: The Hidden Cost of Paper Checks  Expensive – anywhere from $2 - $10 or more  Prone to errors  Manual work – non value add  The Unclaimed Property Issue  The check lost in the mail headache © 2012 Accounts Payable Now & Tomorrow and14 Mary S. Schaeffer
  • 15. Alternative to Paper Checks  P-card  ACH  Pay from statements  Limited controlled circumstances © 2012 Accounts Payable Now & Tomorrow and15 Mary S. Schaeffer
  • 16. #6 The Payment Emergency: Get the Backup for Rush Payments  Documentation often scanty or non-existent  Three way match often not used  Looser controls  Return to requisitioner issue © 2012 Accounts Payable Now & Tomorrow and16 Mary S. Schaeffer
  • 17. Sweeping up after the Elephant: Make Sure The Rush Doesn’t Create a Problem  Ask for backup  Follow up after the fact and get backup  Identify the associated PO and receiver and cancel them  Keep a file of rush payments and check 30 -60 days later to make sure the original invoice didn’t show up and get paid © 2012 Accounts Payable Now & Tomorrow and17 Mary S. Schaeffer
  • 18. #7 The Sales Tax Dilemma: When They Don’t Charge  Resist the urge to ignore the issue  At the end of the day, the buyer is responsible for sales and use tax  Accrue use tax if appropriate – but before you do © 2012 Accounts Payable Now & Tomorrow and18 Mary S. Schaeffer
  • 19. The Best Practice Solution: When They Didn’t Charge Sales Tax  Ask why  Maybe tax wasn’t applicable  Maybe the forgot and they’ll adjust  Maybe they don’t have nexus  If it was included, ask for a revised invoice showing the tax separated out  If they forgot, ask for a new invoice showing separate amount  Don’t accept an invoice for the tax  You’ll forget when the auditors show up © 2012 Accounts Payable Now & Tomorrow and19 Mary S. Schaeffer
  • 20. Worst Practice: The Sales Tax Issue Just add the tax to the invoice  It will get treated like a credit  You’ll have issues when you are audited as you weren’t paying use tax  The one place it won’t end up: at the state Don’t Do It © 2012 Accounts Payable Now & Tomorrow and20 Mary S. Schaeffer
  • 21. #8 The Internal Control Issue: Returning Checks to Requisitioners  Inefficient for AP  Checks sometimes lost  Occasionally fraud  Can lead to duplicate payments © 2012 Accounts Payable Now & Tomorrow and21 Mary S. Schaeffer
  • 22. Handling Requests for Returned Checks  Ask what the business reason is  Don’t make it easy  Create a form, requiring executive approval  Require electronic payments for rush items  Get your auditors involved © 2012 Accounts Payable Now & Tomorrow and22 Mary S. Schaeffer
  • 23. #9 The Receipt Conundrum: What to Do with All Those T&E Receipts  Some employees play games with receipts  Now almost 60% require all receipts for expense reimbursement  Over one-quarter are considering now asking for detailed meal receipts © 2012 Accounts Payable Now & Tomorrow and23 Mary S. Schaeffer
  • 24. T&E Receipts Best Practice: Require All Receipts be Submitted  Routinely question Spot check  5-10% randomly  All known envelope pushers  All C-level execs (assuming management dictates this) © 2012 Accounts Payable Now & Tomorrow and24 Mary S. Schaeffer
  • 25. #10 The Silent Zappers: Productivity Killers  Not having invoices go to AP first  Petty cash boxes  Not returning invoices addressed inappropriately  Not having strong coding standards for invoices and master vendor file  Invoices addressed to no one  Not using direct deposit for T&E reimbursement for everyone © 2012 Accounts Payable Now & Tomorrow and25 Mary S. Schaeffer
  • 26. #11 Keeping Score: Tracking and Resolving Discrepant Invoices  Discrepancies – Yuk  Tend to drag on  Without monitoring  Can go on for 30 days or longer  Second invoice sent  Sometimes paid © 2012 Accounts Payable Now & Tomorrow and26 Mary S. Schaeffer
  • 27. Discrepant Invoices: Avoiding the Endless Life Problem  Track so no one forgets  Regular follow up  Make it a policy to resolve before the due date © 2012 Accounts Payable Now & Tomorrow and27 Mary S. Schaeffer
  • 28. #12 Where’s the Invoice: The Visibility Factor  The he said-she said problem with purchasing  The floating invoice problem  The “Where’s My Money” Calls  The “Did You Get My Invoice” Calls  The “When Are You Going to Pay Me” Calls © 2012 Accounts Payable Now & Tomorrow and28 Mary S. Schaeffer
  • 29. Practices to Ensure Complete Invoice Visibility  Centralized receipt of invoices  Ideally in AP  The polite return of invoices addressed to no one E-invoicing © 2012 Accounts Payable Now & Tomorrow and29 Mary S. Schaeffer
  • 30. How You Can Get Started  Talk to peers  Vendor demos  Ask Anybill  Email: info@anybill.com  Call: 877-426-9245 © 2012 Accounts Payable Now & Tomorrow and30 Mary S. Schaeffer
  • 31. Thank you/Questions Questions always welcome. To share your thoughts and insights Mary Schaeffer  marys@ap-now.com  302 836 0540  Sign up for our free weekly ezine at www.ap-now.com/ezinesignup.html © 2012 Accounts Payable Now & Tomorrow and31 Mary S. Schaeffer
  • 32. 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 marys@ap-now.com © 2012 Accounts Payable Now & Tomorrow and32 Mary S. Schaeffer
  • 33. © 2012 Accounts Payable Now & Tomorrow and33 Mary S. Schaeffer