Page 72 - Accounting Best Practices

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3–38 Create Different Supplier Accounts for Different Terms
3–36 ADD SUPPLIER 800-NUMBERS TO MASTER FILE 61
When there are problems with an invoice submitted by a supplier, an accounts
payable staff person must call the supplier to discuss the issue. If the problem
requires a lengthy discussion, or the supplier is located far away, the company
may find itself incurring substantial phone charges to resolve issues that are not
even its fault.
This problem can be resolved by including the 800-number for each supplier
in the computer master file, assuming there is such a number. By doing so, the
accounting staff can readily access the toll-free number and use it to contact the
supplier. After all, if the supplier caused the problem, it should pay for the call
required to resolve it.

Cost: Installation time:

3–37 ASSIGN PAYABLES STAFF TO SPECIFIC SUPPLIERS
When suppliers call a company to check on the status of payments, the clerical
staff must research the information prior to giving a response. This can require a
substantial amount of clerical time, and can also yield differing replies to suppli-
ers if they call the company several times, resulting in supplier frustration. In
addition, incoming supplier invoices may contain special provisions that require
a detailed knowledge of the underlying purchasing contracts; otherwise, pay-
ments may be recorded improperly.
A simple way to avoid all these problems is to assign supplier accounts to
specific accounts payable staff. By doing so, the accounting staff can individually
concentrate their attention on a smaller group of suppliers, allowing them to learn
how each one presents invoices for payment and how their payment transactions
should be recorded. In addition, because of their increased knowledge level, they
can provide answers to supplier questions more quickly and with greater accuracy.
This best practice is not a useful solution for very small companies, since
there may be only one payables staff person available. It also presents problems
for suppliers if their assigned staff person is not available, so the accounting man-
ager should consider assigning a back-up person to each account.

Cost: Installation time:

3–38 CREATE DIFFERENT SUPPLIER ACCOUNTS
FOR DIFFERENT TERMS

Suppliers occasionally require different payment terms for different products or
services. For example, one product must be paid for within 30 days, while another