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Accounts Payable Best Practices
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it into the check-printing program, so that the signature is automatically affixed to
each check with no manual intervention.
The only problem with a signature stamp is that it can be misused to sign
unauthorized checks or legal documents. This problem can be avoided by locking
it up in the company safe and severely limiting access to the safe. It may also be
necessary to lock up check stock, thereby making it doubly difficult for anyone to
issue an unauthorized signed check.
By using a signature stamp, one can eliminate the time wasted to find a
check-signer, while also avoiding the work required to attach back-up documents
to checks and then file these documents subsequent to review. This is one of the
easiest best practices to implement and should be one of the first ones that a con-
troller should institute.

Cost: Installation time:

3–33 CREATE DIRECT PURCHASE INTERFACES TO SUPPLIERS
A common practice when purchasing is to issue a separate purchase order to a
supplier whenever a company wants to buy additional items. One solution to this
problem is to consolidate all the purchase orders into a single large one that cov-
ers a long time period, which is called a blanket purchase order. This best practice
is described later in this chapter in the ‘‘Use Blanket Purchase Orders” section.
Though an excellent approach, it is sometimes possible to eliminate the purchase
order entirely by using a direct purchase interface to a supplier.
This best practice involves creating a computer or fax linkage to a supplier,
so that employees can order supplies directly from the supplier. By doing so, the
purchasing staff does not have to become involved in any purchases and the
accounts payable staff does not have to match any purchase orders to supplier
invoices, thereby saving time in two departments. Though a clear efficiency
improvement, this approach must be used with care because it eliminates some
control over purchases. Accordingly, it is usually only used for the purchase of
small-dollar items that are bought on a repetitive basis. Good examples of suppliers
that might be used for this approach are office or maintenance supply vendors. In
these cases, a company can create a standard form that only includes certain
products. Employees are allowed to fill out the form with any quantity they want
(within reason) and fax or mail it to the supplier, which uses it as authorization to
send goods to the company. A more advanced version of this format is to set up
the form on e-mail or on an electronic form directly linked to a supplier’s customer
orders database, for instant electronic transmission to the supplier. This latter
approach is faster and may allow a supplier to directly input an order into its
computer system, eliminating keypunching errors. By using a preset form for
ordering, a company can effectively curtail purchases to a few preselected items
that do not require further control.