Early in my consulting career, ed an Accounts Payable (AP) Supervisor set me straight. She told me that AP is all about routine. Expense reimbursements go out on Monday. Domestic vendors on Tuesday. International on Wednesday. If this new system that I was training them on was going to work, it had to make it easier for them to keep on track. That changed my view about AP. It’s not just AR with the credits and debits reversed. If there’s one thing that keeps an AP Supervisor up at night, it’s the sudden question that forces them to drop everything and go searching through the files, because vendors get cranky when their payments don’t come through.
So, what questions can cause AP to go scurrying to the files? Well, anything that the computer system doesn’t capture, like:
- Who authorized this payment? Someone may have exceeded their limit. Someone may have authorized a payment without knowing all the facts. There might have been a dispute with the vendor AP was unaware of at the time.
- Why did we do this? Sometimes the simplest questions can be the hardest to answer. Staff have to look at the invoice. Maybe there’s a comment there. Or maybe the Purchase Order has more detail. Wasn’t there an email discussion about this, maybe six months ago? You get the picture.
- Tax (or anything to do with the government). Governments have an annoying habit of changing their minds. What used to work has suddenly changed. And guess what? The change is retroactive to this time last year. You have to pull all of the affected invoices and rework them using the new rules. Good luck!
- Litigation. Lawyers like to go fishing, hoping to catch something to their advantage. When a requirement to produce documentation is received, not only do you have to pull and make copies of all of the documentation, but you also need to review it yourself to determine the impact of what you find. I hope nobody had plans for the weekend.
You get the idea. You need a central repository that will capture electronically everything at the time the transaction is done, including email exchanges, purchasing documentation, contracts and, of course, the approved invoice itself. And for those people who can’t remember if they submitted this or that expense, wouldn’t it be cool to send them a link and say, “Feel free to browse the transactions yourself.” Then your AP department will get a good night’s sleep and all your vendors will get paid on time.
Reposted with the kind permission of iDatix: http://www.idatix.com/insider-perspective-what-keeps-you-up-at-night-in-accounts-payable/