[Whitepaper] Emerging Concerns in Accounts Payable

346 views

Published on

The business landscape in general, including and especially accounts payable,is changing at a pace not seen in a long time, if ever. When asked to identify hot topic issues for the next year for accounts payable it wasn’t difficult. After very little investigation the following five issues quickly rose to the top of the list.
New types of fraud focused on the payment function have become such an issue the FBI has issued warnings.

AP automation has really taken off and shows no sign of abating with applications for organizations of all sizes.
Invoice receipt, a seemingly staid static process, is evolving with new approaches now becoming commonplace
The master vendor file has gained increased prominence given the increased need for vendor communication.
Career responsibility continues to shift to the individual, with organization’s taking less responsibility.

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
346
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

[Whitepaper] Emerging Concerns in Accounts Payable

  1. 1. 1Anybill.com | info@anybill.com1801 Pennsylvania Avenue, NW, Suite 700 | Washington, DC 20006 | W 202-682-6300 | F 202-833-2141IntroductionThe business landscape in general, including and especially accounts payable,is changing at a pace not seen in a long time, if ever. When asked to identify hottopic issues for the next year for accounts payable it wasn’t difficult. After very littleinvestigation the following five issues quickly rose to the top of the list.++ New types of fraud focused on the payment function have become such an issuethe FBI has issued warnings.++ AP automation has really taken off and shows no sign of abating with applicationsfor organizations of all sizes.++ Invoice receipt, a seemingly staid static process, is evolving with new approachesnow becoming commonplace.++ The master vendor file has gained increased prominence given the increased needfor vendor communication.++ Career responsibility continues to shift to the individual, with organization’s takingless responsibility.Interestingly, all had a huge technology influencer. Unfortunately, technology whileputting productivity improvements within the accounts payable function within thegrasp of just about every organization also makes it easier for thieves to defraud.Thus, the task of continuing to learn about new payment frauds and the protectionsavailable to fight those swindles is now added to the long list of areas professionalsconcerned about payment issues need to be concerned about. Let’s look at eachissue in a little more depth.FraudIt’s an ugly issue but one every organization needs to address. It can and does happento just about everyone at one time or another. But just because someone tries tosteal from you doesn’t mean they are going to be successful. Their victory dependsto a large extent on the protections you put (or don’t put) in place. What many peopledon’t realize is that many frauds begin with an honest mistake. Hence your verybest first step to protect your organization against payment fraud is to employ bestpractices incorporating strong internal controls throughout your payment function.It’s that simple.Emerging Concerns in 2012for Accounts PayableBy Mary S. Schaeffer
  2. 2. 2Anybill.com | info@anybill.com1801 Pennsylvania Avenue, NW, Suite 700 | Washington, DC 20006 | W 202-682-6300 | F 202-833-2141Emerging Concerns in 2012for Accounts PayableStrong internal controls are important for an often over-looked reason. Youremployees know where the weaknesses are within your system. And, like it ornot, a few employees will steal from their employers. Making this matter evenmore distressing is the fact that your biggest risk is with your long-term trustedemployees. The statistics reveal over and over that when fraud is committed, themost frequent offender is a long-term trusted employee. Hence it is imperative thatcontrols be across the board and appropriate segregation of duties be maintainedat all times.The newest frauds appear to be coming out of Eastern Europe although that isnot apparent until the frauds unravel after the money has left the country. Thesesophisticated crooks are zeroing in on the ACH and the professionals working inaccounts payable to facilitate their crimes. Organizations need to be on top of thisfraud as they have only 24 hours to notify their banks of unauthorized transactionsin order to have the transactions reversed. After that it is unlikely the money willbe recovered.To guard against these frauds, talk to your banks about the services they offer toprevent unauthorized transactions. You might also consider daily bank reconciliations(remember the 24 hour limitation) and using a separate computer for online bankingactivity and online banking activity only.Accounts Payable AutomationWhen automation first came to the accounts payable function, it was somethingthat only the very biggest companies could afford. But, all that has changed.Technology itself has gotten cheaper with applications now available for almost everypocketbook. Not only are there third-party applications, but many accounts payabledepartments are using common technology to create a semi-automated process.Accepting invoices via email and e-fax are simple examples.As previously mentioned, third-party invoice processing systems are no longer costly,with many having pay-per-use options. Impending changes at the US Post Officemake it likely that we will see at least a one-day increase in postal time for all firstclass mail. While this may not mean much to consumers, it will mean an awful lot tobusinesses relying on the mail for both receipt of their invoices and payments. It isexpected that mail volume will drop 50% by 2020.For accounts payable departments dependent on US mail this means less timeto process invoices and the possibility of more lost early payment discounts andadditional late fees. And while many organizations think they are not impacted,some vendors have been accruing late fees and unearned early payment discounts.When an open credit becomes available, they are being used to offset these accruals.
  3. 3. 3Anybill.com | info@anybill.com1801 Pennsylvania Avenue, NW, Suite 700 | Washington, DC 20006 | W 202-682-6300 | F 202-833-2141Emerging Concerns in 2012for Accounts PayableReceipt of InvoicesAs alluded to above, best practices for the receipt of invoices has started to change.Given the changes coming to the US Post Office we expect a growing number ofcompanies to move away from snail mail for the delivery of invoices.Best practices for invoice receipt include use of a third party invoice processorsuch as Anybill and the centralization of the receipt of invoices not delivered by theprocessor. This centralization means:++ One postal address,++ One email address, such as invoices@abccompany.com, and++ One fax number.Automation of the receipt of invoices is the first step towards a more efficient, fraudresistant invoice processing approach. It also translates into a greater number ofearned early payment discounts and fewer late fees.If the fax number is combined with an e-fax facility, the benefits of the processincrease as the fax is converted to an electronic document.Master Vendor FileThe classic Warren Buffett metaphor “It’s only when the tide goes out that you learnwho’s been swimming naked,” aptly described the corporate world and its mastervendor files in the late winter and early spring of 2011. With the specter of corporatereporting looming, many companies went to their master vendor files to get data tobegin a massive solicitation of their vendors’ taxpayer identification numbers. Whatthey found was not pretty.While a few had kept their master vendor files in tip-top shape, most had not. Thehysteria that ensued underscored the importance of the master vendor file and theneed to follow best practices. These will help avoid duplicate vendor entries whichcan lead to duplicate payments, make fraud more difficult while simultaneouslymaking it easier to communicate with vendors.Best practices to keep your master vendor file in tip-top shape include:++ Use of a rigid coding standard for data entry,++ Regular cleansing deactivating inactive vendors and++ Incorporating appropriate segregation of duties when assigning responsibility forentering new vendors and updating information in the master vendor file.
  4. 4. 4About AnybillBuilt on the premise that all payments are critical, Anybill was created in 2001 to transition any AP transaction to an automated solution.We combine our proprietary technology with unmatched customer service to deliver a complete Software-as-a-Service solution. Clients retainefficient workflows while gaining greater visibility and control, better cash flow management, streamlined approval processes, 24/7 accessibility,and increased auditor confidence. Anybill works with clients ranging from non-profit associations to some of the largest multinationals. We areheadquartered in Washington, DC, and are SSAE 16 SOC compliant. Anybill.com | info@anybill.com1801 Pennsylvania Avenue, NW, Suite 700 | Washington, DC 20006 | W 202-682-6300 | F 202-833-2141Emerging Concerns in 2012for Accounts PayableYour Professional FutureWe are each captains of our own ship when it comes to our careers. Companies areallocating fewer and fewer dollars for employee training. Thus the responsibilityfor keeping up to date is left mostly to the individual employee. To be fair, manyorganizations do have small training budgets and will often spend the funds ifthe employee makes a strong case for attending. This means finding the learningopportunity and presenting management with the benefits the organization willreceive if you attend. It is critical that the event be tied back to improved performancehelping the organization.You can take charge of your career by looking for free and low-cost learningopportunities. They abound today, especially given the technology that makes onlinelearning affordable. Free electronic newsletters, free webinars sponsored by vendorsand of course, numerous websites loaded with information all make it possible forthose looking to stay ahead of the game to do so. Additionally, there are many low-cost learning options.We can’t close off a discussion about career advancement without mentioning thevalue of networking. Not only are networks important sources of information aboutjob openings, your peers can provide valued input when you have one of thosethorny technical questions about an accounts payable issue. One of the best ways tonetwork, especially if you don’t know many other professionals in the field, is to signup for LinkedIn and then join several groups. You can post questions and answerthem as well. It is a way for others to get to know you and it’s free.Concluding ThoughtsBob Dylan probably wasn’t thinking about the accounts payable and payment functionwhen he wrote, “the times, they are a changing,” but the lyric applies. The challengefacing every professional is to keep up with those changes.© 2012 Mary S. Schaeffer and Accounts Payable Now & Tomorrow

×