The accounts payable process can be streamlined through the usage of many best practices that are listed in this chapter; however, a standard recurring problem is those payments that bypass the whole preplanned payable process. They 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 is performing, create a manual check, have it signed, and enter the data on the check into the computer system. To make matters worse, as a result of rush basis of the payment, it is common for the accounting person to forget to really make the entry into the computer system, which throws off the financial institution reconciliation work at the conclusion 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. It’s possible to use two methods to cut back the number of manual checks. The first method is to cut off the inflow of check requests, while the second reason is (paradoxically) to automate the cutting of manual checks. The initial approach is really a hard one, since it takes tallying the manual checks that have been cut every month and following up with the check requesters to see if there could be an even more orderly types of making requests in the foreseeable future, 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 anyone can request an always check anytime, and an accounting person can immediately sit down at some type of computer terminal, enter the check information, and own it print out at once. This method has the unique advantage of avoiding any trouble with not reentering information into the computer system, because it has been entered there in the very first place (which avoids any future difficulties with the bank reconciliation). It will take slightly longer to make a register this manner, but the entire time savings are greater.
If one adopts this method, it is essential to think about the expense of the printer. Because it is generally a more costly tractor-feed model, this approach is probably not cost-effective unless there are always a substantial number of manual checks being created. A next alternative is to really make the process of fabricating a guide check so difficult that requesters will avoid this approach. As an example, the request may require the signature of a senior manager (who will undoubtedly be significantly less than very happy to be interrupted for the signature) or multiple approving signatures. In addition, the accounting department could charge an exorbitant amount because of this service to the requesting department on the corporate financial statements. Further, a written report itemizing all manual check requests may be provided for senior management each month, highlighting who’s bothering the accounting staff with your items. Any combination of these actions should reduce the use of manual checks.