Advertisement

The accounts payable process could be streamlined through the usage of many best practices that are listed in this chapter; however, a common recurring problem is those payments that bypass the entire preplanned payable process. They are 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 a manual check, have it signed, and enter the data on the check to the computer system. To make matters worse, due to the rush basis of the payment, it is common for the accounting person to forget to make the entry to the computer system, which throws off the bank reconciliation work by the end of the month, which creates still more work to track down and fix the problem. Simply speaking, issuing manual checks significantly worsens the efficiency of the accounts payable staff. You can use two methods to reduce how many manual checks. The very first method is to take off the inflow of check requests, while the second reason is (paradoxically) to automate the cutting of manual checks. The very first approach is really a hard one, since it requires tallying the manual checks that were cut each month and following up with the check requesters to see if there might be a far more orderly method of making requests in the future, thereby allowing more checks to be issued through the normal accounts payable process. Unfortunately, this practice requires so long 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, is always to preset a printer with check stock, to ensure that anyone can request a check whenever you want, and an accounting person can immediately sit down at some type of computer terminal, enter the check information, and contain it print out at once. This method has the unique good thing about avoiding any trouble with not reentering information to the computer system, as it is being entered there in the first place (which avoids any future difficulties with the bank reconciliation). It tends to take slightly longer to make a register this manner, but the overall time savings are greater.

If one adopts this method, it is essential to consider the price of the printer. Since it is generally a higher priced tractor-feed model, this method is probably not cost-effective unless there are certainly a substantial amount of manual checks being created. A next alternative is to help make the process of fabricating a guide check so very hard that requesters will avoid this approach. For example, the request may require the signature of a senior manager (who will 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 report itemizing all manual check requests may be sent to senior management each month, highlighting who is bothering the accounting staff with these items. Any combination of the actions should reduce the use of manual checks.

Advertisement

Advertisement
Filed under : Bikers Pintar,