The accounts payable process may be streamlined through the use of many best practices which can be listed in this chapter; however, a common recurring problem is those payments that go around the whole preplanned payable process. These are the inevitable payments that 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 many of these cases, the accounting staff must drop what it does, create an information check, obtain it signed, and enter the information on the check into the computer system. To create matters worse, because of the rush basis of the payment, it’s common for the accounting person to forget to help 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. Simply speaking, 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 very first method is always to cut off the inflow of check requests, while the second reason is (paradoxically) to automate the cutting of manual checks. The first approach is just a hard one, since it needs tallying the manual checks that have been cut monthly and following up with the check requesters to see if there can be an even more orderly method of making requests later on, thereby allowing more checks to be issued through the standard 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, to ensure that anyone can request a check always whenever you want, and an accounting person can immediately take a seat at some type of computer terminal, enter the check information, and own it print out at once. This approach has the initial advantage of 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 financial institution reconciliation). It will take slightly longer to produce a check in this manner, but the general time savings are greater.
If one adopts this method, it is very important to take into account the cost of the printer. Because it is generally a more costly tractor-feed model, this method may not be cost-effective unless there are always a substantial quantity of manual checks being created. A third alternative is to really make the process of creating a guide check so difficult that requesters will avoid this approach. For example, the request may require the signature of a senior manager (who is going to be significantly less than pleased to be interrupted for the signature) or multiple approving signatures. In addition, 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 can be sent to senior management each month, highlighting who is bothering the accounting staff with one of these items. Any combination of the actions should reduce the usage of manual checks.