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Accounts Payable Best Practices
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held from time to time). Repetitive invoicing is quite useful here, because a com-
pany is liable to the court to make these payments, and can be subject to onerous
penalties if it does not do so. By shifting the burden of making this payment to
the computer system, there is less risk of not making the payment.
Automating repetitive payments that occur in the same amounts and on the
same dates is a good way to remove the approval step from the accounts payable
process, though this improvement typically only covers a small percentage of the
total workload of the accounts payable staff.
Cost: Installation time:

3–26 ELIMINATE MANUAL CHECKS

The accounts payable process can be streamlined through the use of many best
practices that are listed in this chapter; however, a common recurring problem is
those payments that go around the entire preplanned payable process. These are
the inevitable payments that are sudden and unplanned and that must 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 doing, create a manual check, get it signed, and enter
the information on the check into 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 into the computer system, which throws off the bank rec-
onciliation 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.
One can use two methods to reduce the number of manual checks. The first
method is to cut off the inflow of check requests, while the second is (paradoxi-
cally) to automate the cutting of manual checks. The first approach is a hard one,
since it requires tallying the manual checks that were cut each month and follow-
ing up with the check requesters to see if there might be a more orderly manner
of making requests in the 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 second, and better, approach, is to preset a printer with
check stock, so that anyone can request a check at any time, and an accounting
person can immediately sit down at a computer terminal, enter the check infor-
mation, and have it print out at once. This approach has the unique benefit of
avoiding any trouble with not reentering information into the computer system,
since it is being entered there in the first place (which avoids any future problems
with the bank reconciliation). It tends to take slightly longer to create a check in
this manner, but the overall time savings are greater. If one adopts this approach,