Page 86 - Accounting Best Practices

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4–8 Automatically Check Errors during Invoice Date Entry
other problem is that the most efficient EDI systems require some automation.
A standard EDI system requires one to manually enter all transactions, as well
as manually extract them from the EDI mailbox and keypunch them into the
receiving computer. To fully automate the system, a company must have its
software engineers program an interface between the accounting computer sys-
tem and the EDI system, which can be an expensive undertaking. Without the
interface, an EDI system is really nothing more than a fancy fax machine. Thus,
installing a fully operational EDI system is usually limited to transactions with
high-volume customers and requires a considerable programming expense to
achieve full automation.
Cost: Installation time:

4–8 AUTOMATICALLY CHECK ERRORS DURING
INVOICE DATA ENTRY

Errors during the data-entry phase of creating an invoice can result in a variety of
downstream problems. For example, an incorrect billing address on an invoice
means that the customer will never receive it, which means that the collections
staff must send a new invoice copy. Also, if the quantity, product description, or
price is entered incorrectly, the customer may have a good reason for not paying
the bill. If this happens, the collections staff will have to get involved to work out
the reason for nonpayment and negotiate extra payments (if possible) by customers.
All of these problems are exceptions and require very large amounts of time to
research and fix.
A very useful best practice is to prevent as many data-entry problems in
advance as possible by using computerized data-checking methods. For example,
a field for zip codes can only accept five-digit or nine-digit numbers, which pre-
vents the entry of numbers of an unusual length. The field can also be tied to a file
of all cities and states, so that entering a zip code automatically fills in the city and
state fields. Also, prices of unusual length can be automatically rejected, or prices
can be automatically called up from a file that is linked to a product number. Sim-
ilarly, product descriptions can be automatically entered if the product number is
entered. An example of a ‘‘smart” data-entry system is one that flags part numbers
that are being entered for an existing customer for the first time. The computer can
check the part number entered against a file of items previously ordered by a cus-
tomer and see if there is a chance that the part being ordered might not be the cor-
rect one. There can also be required fields that must have a valid entry or else the
invoice cannot be processed; a good example is the customer purchase order num-
ber field, required by many customers, or else they will not pay the invoice. By
including these automatic error-checking and expert systems into the data-entry
software, it is possible to reduce the number of data-entry errors.