Little Mistakes that Cause Big
Problems in Accounts Payable

Mary Schaeffer
Publisher & Editorial Director AP Now
Author T...
Agenda
Introduction
 Those Processing Bungles that Can Cost Dearly
 Mistakes that Will Make Crooks Lives a Little Easier...
Introduction
 Not everyone will have every problems (hopefully)
 The breakdowns are arbitrary
 Automation definitely he...
Those Processing Bungles that
Can Cost Dearly

4

© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer
Processing: Part 1
 Not developing a rigid coding standard for invoice entry and

insisting processors use it *
 Not foc...
Processing: Part 2
 Processing Check requests without backup
 If you do after-the-fact POs, giving them the invoice to

...
Processing: Part 3
 Promote without cutting removing system access associated

with previous position *
 Not setting up ...
Mistakes that Make Crooks’
Lives a Little Easier

8

© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer
Fraud: Part 1
 Not cancelling credit cards (p-cards and T&E) when an

employee departs
 Returning checks to requisitione...
Fraud: Part 2
 Thinking none of your employees would ever steal from you

and allowing weak internal controls as a result...
Fraud: Part 3
 Not taking proper fraud precautions *
 Not keeping up on the latest information about new frauds;

crooks...
Those Housekeeping Items that
Are So Easy to Ignore

12

© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer
Housekeeping: Part 1
 Never cleansing the master vendor file and deactivating

inactive vendors *
 Not periodically upda...
Housekeeping: Part 2
 Not following up on open credits quickly
 They have a way of evaporating

 Not reviewing your sys...
Mistakes that Will Get You in
Regulatory Hot Water

15

© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer
Regulatory: Part 1
 Not tracking receipt of W-9 *
 Not using IRS TIN Matching
 Paying small IRS fines and penalties

16...
Regulatory: Part 2
 Writing off un-cashed checks to miscellaneous income
 Reporting and remitting unclaimed property to ...
Regulatory: Part 3
 Adding sales tax when paying an invoice that doesn’t show it
 Paying sales tax to the wrong state

1...
Other – Stuff that Didn’t Fit
Elsewhere

19

© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer
Other: Part 1
 Not regularly reviewing unapplied payments *
 Usually from a Rush check request

 Not periodically revie...
Other: Part 2
 Not planning for your future
 It’s your responsibility

 Not keeping up to date on the latest developmen...
Closing Thoughts
 Do you have your work cut out for you?
 Have you noticed how many of these problems could have

been e...
The benefits of AP Automation
Presented by:
Peter Bepler
President & Co-Founder
Anybill

23

© 2011 Accounts Payable Now &...
The Case for AP Automation
Fast Facts
›

$15.70 – average cost to process an invoice

›

17.7 days– average time to proces...
The Case for AP Automation
Why Automate?
›

Improve visibility, efficiency and control with AP automation

›

Process invo...
The Case for AP Automation
The Impact
Time To Process Payables
No Automatic Validation

Lack of Visibility
& Transparency
...
Thank you/Questions
Questions always welcome.
To share your thoughts and insights
Mary Schaeffer
 marys@ap-now.com
 302 ...
About Mary Schaeffer




She also handles most of the firms consulting assignments (focused primarily on AP
issues) ofte...
29

© 2011 Accounts Payable Now & Tomorrow and
Mary S. Schaeffer
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[Webinar] Little Mistakes that Cause Big Problems in Accounts Payable

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It’s often the little things that if left unresolved, end up causing the biggest headaches. What’s even more hellish is that these nightmares have a way of popping up at precisely the wrong time. Typically, the solutions aren’t elaborate or expensive; they simply involve identifying the mistake and rectifying it.

Hear Mary Schaeffer, Editor of AP Now as she:
•Identifies 25 AP mistakes that on the face seem minor but could result in major headaches
•Addresses why these issues can cause complications and what you can do to avoid these in the future
•Discusses some strategic tools that you can implement to avoid this all together!

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[Webinar] Little Mistakes that Cause Big Problems in Accounts Payable

  1. 1. Little Mistakes that Cause Big Problems in Accounts Payable Mary Schaeffer Publisher & Editorial Director AP Now Author The Controllers’ & CFOs’ Guide to Accounts Payable + 15 other business books
  2. 2. Agenda Introduction  Those Processing Bungles that Can Cost Dearly  Mistakes that Will Make Crooks Lives a Little Easier  Those Housekeeping Items that Are So Easy to Ignore  Mistakes that Will Get You in Regulatory Hot Water  Other – Stuff that Didn’t Fit Elsewhere  Closing Thoughts  2 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  3. 3. Introduction  Not everyone will have every problems (hopefully)  The breakdowns are arbitrary  Automation definitely helps solve some of these problems  We’ve asterisked (*) those where automation will help 3 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  4. 4. Those Processing Bungles that Can Cost Dearly 4 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  5. 5. Processing: Part 1  Not developing a rigid coding standard for invoice entry and insisting processors use it *  Not focusing on invoice number when entering data *  Not training new processors – especially about credits 5 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  6. 6. Processing: Part 2  Processing Check requests without backup  If you do after-the-fact POs, giving them the invoice to create the PO  Not getting 100% policy compliance on T&E * 6 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  7. 7. Processing: Part 3  Promote without cutting removing system access associated with previous position *  Not setting up a separate fax for incoming invoices – better e-fax  Using a rubber stamp to sign checks 7 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  8. 8. Mistakes that Make Crooks’ Lives a Little Easier 8 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  9. 9. Fraud: Part 1  Not cancelling credit cards (p-cards and T&E) when an employee departs  Returning checks to requisitioners *  Not having a separate computer for online banking - ONLY 9 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  10. 10. Fraud: Part 2  Thinking none of your employees would ever steal from you and allowing weak internal controls as a result  Not insisting anyone associated with the payment function take at least 5 consecutive days off  Not getting 100% policy compliance on T&E * 10 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  11. 11. Fraud: Part 3  Not taking proper fraud precautions *  Not keeping up on the latest information about new frauds; crooks are regularly developing new “approaches” to get their hands on your money  Not talking to your bank regularly about its new fraud prevention/detection tools 11 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  12. 12. Those Housekeeping Items that Are So Easy to Ignore 12 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  13. 13. Housekeeping: Part 1  Never cleansing the master vendor file and deactivating inactive vendors *  Not periodically updating the contacts in your master vendor file  Not reviewing the standard payment terms shown in the master vendor file *  No one will complain if you pay them early 13 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  14. 14. Housekeeping: Part 2  Not following up on open credits quickly  They have a way of evaporating  Not reviewing your system defaults for all aspects of the accounts payable function *  Especially important if your business does not follow “traditional” business patterns 14 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  15. 15. Mistakes that Will Get You in Regulatory Hot Water 15 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  16. 16. Regulatory: Part 1  Not tracking receipt of W-9 *  Not using IRS TIN Matching  Paying small IRS fines and penalties 16 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  17. 17. Regulatory: Part 2  Writing off un-cashed checks to miscellaneous income  Reporting and remitting unclaimed property to the wrong state  Claiming money from missingmoney.com when not complying with unclaimed property laws 17 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  18. 18. Regulatory: Part 3  Adding sales tax when paying an invoice that doesn’t show it  Paying sales tax to the wrong state 18 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  19. 19. Other – Stuff that Didn’t Fit Elsewhere 19 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  20. 20. Other: Part 1  Not regularly reviewing unapplied payments *  Usually from a Rush check request  Not periodically reviewing and closing open receivers *  Not necessarily an AP job  Document, document, document  Not periodically reviewing and closing open Pos * 20 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  21. 21. Other: Part 2  Not planning for your future  It’s your responsibility  Not keeping up to date on the latest developments affecting your job and career  Not learning one or more new skills each year 21 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  22. 22. Closing Thoughts  Do you have your work cut out for you?  Have you noticed how many of these problems could have been eliminated through automation? 22 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  23. 23. The benefits of AP Automation Presented by: Peter Bepler President & Co-Founder Anybill 23 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  24. 24. The Case for AP Automation Fast Facts › $15.70 – average cost to process an invoice › 17.7 days– average time to process an invoice › 14% - average number of invoices with errors › $12 billion – average dollar amount financial institutions lose to payment fraud annually Anybill 2010, All Rights Reserved Not For Distribution
  25. 25. The Case for AP Automation Why Automate? › Improve visibility, efficiency and control with AP automation › Process invoices more efficiently using web-based software › Identify and eliminate bottlenecks and delays that lead to overdue, missed or duplicate payments › View expenses in real-time to manage cash flow › Control spending with workflow and approval features › Gain access to historical data with robust, on-demand reporting Anybill 2010, All Rights Reserved Not For Distribution
  26. 26. The Case for AP Automation The Impact Time To Process Payables No Automatic Validation Lack of Visibility & Transparency High Processing Costs Anybill 2010, All Rights Reserved › Delays Posting Expenses › Poor Use of Working Capital › Damaged Supplier Relationships › Overpayments and Duplicate Payments due to Billing Errors › Difficulties Budgeting, Planning, Forecasting › Lack of Control › Higher Audit Risk › Difficulty Responding to Vendor Inquiries D › Drains Internal Resources › Waste of Operating Capital Not For Distribution
  27. 27. 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 27 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  28. 28. About Mary Schaeffer   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://apnow.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.  28 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.apnow.com) a fee-based newsletter published by CRYSTALLUS, Inc. She can be reached at marys@ap-now.com © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer
  29. 29. 29 © 2011 Accounts Payable Now & Tomorrow and Mary S. Schaeffer

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