Best practices for the accounts payable function are critical for those organizations concerned about profitability. Poor practices result in excess cost, duplicate payments, increased processing expenses, potential fraud, and frayed vendor relationships. And, of course there is the growing issue of regulatory compliance as the federal and state governments look for their fair share. This course presents information you can use to identify best practice problems as well as regulatory concerns. Industry expert Mary S. Schaeffer explains the issues related to the accounts payable function to auditors, controllers, and managers. She then reveals the best practices for myriad issues and identifies almost best practices for those cases where it is not possible to use the best practice.
Please note that the information covered in this course is also covered in Creating an Accounts Payable Policy and Procedures Manual, Internal Controls in Accounts Payable, and Vendor Issues in Accounts Payable.
Upon successful completion of this course, participants will be able to:
- Identify how to implement a best practice policy.
- Cite how you can utilize a policy and procedures manual effectively.
- Identify the importance of establishing strong master vendor file practices.
- Cite why the segregation of duties is important.
- Identify master vendor file cleanup practices.
- Identify effective invoice receipt practices.
- List effective data entry rules for invoice processors.
- Cite best practice invoice handling routines.
- Define effective practices for short-paying invoices, handling unidentified invoices, and managing discrepant invoices.
- Identify effective processes for printing and signing checks and storing check stock.
- Cite the benefits of paying electronically.
- Identify benefits and controls associated with a strong p-card program.
- Cite best practices for payments made outside accounts payable.
- Identify ways to pay small dollar invoices without issuing a check.
- Identify the importance of creating and maintaining a policy and procedures manual.
- List strategies to eliminate duplicate payments when original invoices are missing.
- Identify lost funds through an effective supplier statement review policy.
- Identify routines that help avoid making duplicate payments.
- Identify the importance of creating an effective policy for requiring backup for rush payments.
- Identify the importance of segregation of duties.
- List issues that need to be addressed when an employee leaves the organization.
- Cite the importance of a mandatory vacation policy as well as a job rotation policy.
- Cite the importance of a strong travel and entertainment policy.
- List reasons why cash advances are difficult for the accounts payable function.
- Identify an efficient and effective policy for reimbursing employee for travel expenses.
- Identify what is required for information reporting to the IRS.
- Cite how to integrate IRS TIN Matching into the new vendor setup function.
- Identify a policy that will enable the organization to report and remit unclaimed property.
- Identify a policy that includes accruing and reporting use tax for all the organization's sales tax obligations.
- Identify how to incorporate regular OFAC checking into the payment process to ensure payments are not made to terrorists.
- Identify potential situations where a payment may actually be a bribe to a foreign official in conflict with FCPA regulations.
- Identify a process to effectively deal with invoices.
- Identify a policy to address issues related to the use mobile devices in accounts payable.
- Identify methodologies for communicating relevant payment information to vendors before problems arise.
- Identify how payment timing can help or hurt an organization.
- Cite strategies for sharing critical payment status information with vendors.
Table of Contents
Chapter 1 – Managing the AP Function
10 Reasons Why Best Practices in Accounts Payable Matter
The Issue: Best Practice Policy
The Issue: Policy and Procedures Manual
The Issue: Staff Training
The Issue: Soliciting Process Improvement Recommendations
The Issue: Payment Audits
Chapter 1 Review Questions
Chapter 2 – Master Vendor File
Issue: Who Has Access to the Master Vendor File
Issue: Master Vendor File Setup
Issue: Naming Conventions for the Master Vendor File
Issue: Updating the Master Vendor File
Issue: Master Vendor File Cleanup
Issue: Self-Service Master Vendor Files
Chapter 2 Review Questions
Chapter 3 – Invoice Processing
The Issue: Receipt of Invoices
The Issue: Invoice Handling Approvals
The Issue: Invoice Data Requirements
The Issue: Verifying Invoice Data
The Issue: Invoice Coding Standards
Chapter 3 Review Questions
Chapter 4 – Invoice Headaches: The Problem Children Invoices
The Issue: Short-Paying Invoices
The Issue: Handling Unidentified Invoices
The Issue: Handling Invoices without Invoice Numbers
The Issue: Discrepant Invoices
Chapter 4 Review Questions
Chapter 5 – Checks
The Issue: Approach to Paying by Check
The Issue: Check Printing
The Issue: Check Signing
The Issue: Check Stock Storage
The Issue: Distribution of Checks
The Issue: Check Fraud
The Issue: Use of Payee Name Positive Pay
Chapter 5 Review Questions
Chapter 6 – ACH (Electronic Payments)
The Issue: Approach to Paying Electronically
The Issue: Converting Vendors to ACH Payments
The Issue: Handling Change of Bank Account Requests
The Issue: Convincing Vendors to Convert
The Issue: Handling Remittance Information
Chapter 6 Review Questions
Chapter 7 – An Effective P-Card Program
The Issue: Design of the P-Card Program
The Issue: Setting Strong Internal Controls in Your P-card Program
The Issue: Increasing Usage of the P-card in Your Organization
The Issue: Setting Attractive Payment Terms
The Issue: Increasing Rebates based on Card Usage
Chapter 7 Review Questions
Chapter 8 – Payment Strategy
The Issue: Establishing an Overall Payment Strategy
The Issue: Paying Small-Dollar Invoices
The Issue: A Rush or Emergency Payment Policy
The Issue: Payments Made Outside Accounts Payable
The Issue: Basic Fraud Protection against ACH Fraud
Chapter 8 Review Questions
Chapter 9 – Policy and Procedures Manual
Issue: Use of the Manual
Issue: Creating an Accounts Payable Policy and Procedures Manual
Issue Updating an Accounts Payable Policy and Procedures Manual
Issue: Providing Access to the Accounts Payable Policy and Procedures Manual
Chapter 9 Review Questions
Chapter 10 – Operational Aspects
The Issue: Paying When the Original Invoice Is Missing
The Issue: Limiting Calls to Accounts Payable
The Issue: Petty Cash
The Issue: Reviewing supplier statements
The Issue: Adopting a Policy of Never Returning Checks to Requisitioners
Chapter 10 Review Questions
Chapter 11 – Duplicate Payment Issues
The Issue: Using Processing Standards
The Issue: Duplicate Payment Avoidance
The Issue: Mandating a Rigid Work Process or Eliminating Creativity When Processing Invoices
The Issue: Some Quick Checks to Identify Duplicate Payments
Special Pointers for Accounts Payable:
Chapter 11 Review Questions
Chapter 12 – Internal Controls
The Issue: Appropriate Segregation of Duties
The Issue: Appropriate System Access
The Issue: Policy when Employees Leave
The Issue: Eliminating Weak Control Practices
The Issue: Staff Training
Chapter 12 Review Questions
Chapter 13 – Fraud Prevention: General
The Issue: Mandatory Vacation Policy
The Issue: Job Rotation Policy
Chapter 13 Review Questions
Chapter 14 – Travel and Entertainment Policy
The Issue: A Formal Policy
The Issue: Expense Report Form
The Issue: Verifying Data
The Issue: Handling Receipts
The Issue: Detailed Meal Receipts
Chapter 14 Review Questions
Chapter 15 – Travel and Entertainment Issues
The Issue: Cash Advances
The Issue: Unused Tickets
The Issue: Departing Employees
The Issue: Making Travel Reservations
The Issue: Reimbursing Employees
Chapter 15 Review Questions
Chapter 16 – Regulatory Issues: Information Reporting
The Issue: A Form W-9/W-8 Requirement Policy
The Issue: Collecting and Tracking Form W-9 and Form W-8 Policy
The Issue: Using IRS TIN Matching Properly
Chapter 16 Review Questions
Chapter 17 – Regulatory Issues: Unclaimed Property
The Issue: Reporting and Remitting Unclaimed Property
The Issue: Performing Due Diligence for Unclaimed Property
The Issue: Using Social Media to Track Rightful Owners of Unclaimed Property
Chapter 17 Review Questions
Chapter 18 – Regulatory Issues: Other
The Issue: Proper Handling of Sales and Use Tax
The Issue: Regular OFAC Checking
The Issue: Foreign Corrupt Practices Act (FCPA) Monitoring
Chapter 18 Review Questions
Chapter 19 – Technology
The Issue: An Accounts Payable Technology Plan
The Issue: Handling of Emailed Invoices
The Issue: Invoice Automation
The Issue: Use of Mobile Devices in Accounts Payable
Chapter 19 Review Questions
Chapter 20 – Communications/Vendor Relations
The Issue: Communicating Relevant Information to Vendors
The Issue: Working with Purchasing
Chapter 20 Review Questions
Chapter 21 – Cash Flow Management Issues
The Issue: Taking Early Payment Discounts
The Issue: Payment Timing
The Issue: Payment Status Information for Vendors
Chapter 21 Review Questions
Review Question Answers and Rationales
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