The accounts payable process could be streamlined through the use of many best practices that are listed in this chapter; however, a common recurring problem is those payments that bypass the whole preplanned payable process. They are the inevitable payments which are sudden and unplanned and that really must be handled immediately. Examples are payments for pizza deliveries, flowers for bereaved employees, or cash-on-delivery payments. In most of these cases, the accounting staff must drop what it is doing, create a manual check, obtain it signed, and enter the data on the check to the computer system. To make matters worse, as a result of rush basis of the payment, it’s common for the accounting person to forget to make the entry into the computer system, which throws off the financial institution reconciliation work at the end of the month, which creates still more work to track down and fix the problem. In short, issuing manual checks significantly worsens the efficiency of the accounts payable staff. It’s possible to use two methods to lessen how many manual checks. The initial method is to stop the inflow of check requests, while the second reason is (paradoxically) to automate the cutting of manual checks. The initial approach is just a hard one, since it needs tallying the manual checks that were cut every month and following up with the check requesters to see if there could be a far more orderly manner of making requests later on, thereby allowing more checks to be issued through the standard 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 to preset a printer with check stock, to ensure that anyone can request an always check whenever you want, and an accounting person can immediately take a seat at some type of computer terminal, enter the check information, and contain it print out at once. This method has the unique benefit of avoiding any trouble with not reentering information to the computer system, as it will be entered there in the initial place (which avoids any future difficulties with the financial institution reconciliation). It tends to take slightly longer to create a register this manner, but the overall time savings are greater.
If one adopts this process, it is important to take into account the cost of the printer. Because it is generally a more costly tractor-feed model, this method is typically not cost-effective unless there are certainly a substantial quantity of manual checks being created. A next alternative is to help make the process of fabricating a manual check so hard that requesters will avoid this approach. For instance, the request may require the signature of a senior manager (who will be significantly less than happy to be interrupted for the signature) or multiple approving signatures. In addition, the accounting department could charge an exorbitant amount with this service to the requesting department on the corporate financial statements. Further, a written report itemizing all manual check requests could be sent to senior management monthly, highlighting who is bothering the accounting staff with these items. Any combination of these actions should reduce the use of manual checks.