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

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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

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

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

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

© 2011 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 2

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

© 2011 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 3

Those Processing Bungles that

Can Cost Dearly

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Mary S. Schaeffer 4

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

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Mary S. Schaeffer 5

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 *

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Mary S. Schaeffer 6

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

© 2011 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 7

Mistakes that Make Crooks’

Lives a Little Easier

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Mary S. Schaeffer 8

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

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Mary S. Schaeffer 9

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 *

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Mary S. Schaeffer 10

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

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Mary S. Schaeffer 11

Those Housekeeping Items that

Are So Easy to Ignore

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Mary S. Schaeffer 12

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

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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

© 2011 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 14

Mistakes that Will Get You in

Regulatory Hot Water

© 2011 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 15

Regulatory: Part 1

Not tracking receipt of W-9 *

Not using IRS TIN Matching

Paying small IRS fines and penalties

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Mary S. Schaeffer 16

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

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Mary S. Schaeffer 17

Regulatory: Part 3

Adding sales tax when paying an invoice that doesn’t show it

Paying sales tax to the wrong state

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Mary S. Schaeffer 18

Other – Stuff that Didn’t Fit

Elsewhere

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Mary S. Schaeffer 19

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 *

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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

© 2011 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 21

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?

© 2011 Accounts Payable Now & Tomorrow and

Mary S. Schaeffer 22

Presented by:

Peter Bepler

President & Co-Founder

Anybill

The benefits of AP Automation

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Mary S. Schaeffer 23

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

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

The Case for AP Automation The Impact

Time To Process Payables

No Automatic Validation

Lack of Visibility

& Transparency

High Processing Costs

› 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

Anybill 2010, All Rights Reserved Not For Distribution

Thank you/Questions

Questions always welcome.

To share your thoughts and insights

Mary Schaeffer

[email protected]

302 836 0540

Sign up for our free weekly ezine at

www.ap-now.com/ezinesignup.html

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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 [email protected]

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