ARTI ELIMINATE MANUAL CHECKS

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The accounts payable process can be streamlined through the utilization of many best practices which are listed in this chapter; however, a common recurring problem is those payments that bypass the whole preplanned payable process. They’re the inevitable payments which are sudden and unplanned and that must definitely be handled immediately. Examples are payments for pizza deliveries, flowers for bereaved employees, or cash-on-delivery payments. In all of these cases, the accounting staff must drop what it is performing, create an information check, obtain it signed, and enter the data on the check into the computer system. To make matters worse, because of the rush basis of the payment, it’s common for the accounting person to forget to really make the entry in to the computer system, which throws off the bank reconciliation work at the end of the month, which creates still more work to track down and fix the problem. In a nutshell, issuing manual checks significantly worsens the efficiency of the accounts payable staff. One can use two methods to reduce the number of manual checks. The initial method is to cut off the inflow of check requests, while the second is (paradoxically) to automate the cutting of manual checks. The first approach is really a hard one, since it needs tallying the manual checks which were cut monthly and following up with the check requesters to see if there could be an even more orderly types of making requests later on, thereby allowing more checks to be issued through the normal accounts payable process. Unfortunately, this practice requires so much time communicating with the check requesters that the lost time will overtake the resulting time savings by the accounting staff from writing fewer manual checks. The 2nd, and better, approach, would be to preset a printer with check stock, in order that everyone can request a check anytime, and an accounting person can immediately sit down at a pc terminal, enter the check information, and have it print out at once. This process has the initial advantageous asset of avoiding any trouble with not reentering information to the computer system, because it will be entered there in the first place (which avoids any future issues with the financial institution reconciliation). It will take slightly longer to produce a register this manner, but the entire time savings are greater.

If one adopts this approach, it is very important to consider the expense of the printer. Since it is generally a more costly tractor-feed model, this approach may not be cost-effective unless there are certainly a substantial amount of manual checks being created. A third alternative is to make the process of making a manual check so hard that requesters will avoid this approach. As an example, the request may require the signature of a senior manager (who is going to be significantly less than very happy to be interrupted for the signature) or multiple approving signatures. Additionally, the accounting department could charge an exorbitant amount for this service to the requesting department on the corporate financial statements. Further, a written report itemizing all manual check requests may be delivered to senior management monthly, highlighting who is bothering the accounting staff with these items. Any combination of those actions should reduce the utilization of manual checks.

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