Vendor issues in an accounts payable function are often ignored. This is unfortunate because poor controls around the master vendor file, improper data entry, and the lack of rigid internal controls all can result in fraud and duplicate payments. And addressing these issues is not as easy as you might think. There are numerous details that, if ignored, can negatively impact the bottom line. Industry expert Mary Schaeffer reveals common problems and provides strategies that every organization should implement to minimize, if not eliminate, the impact of vendor issues.
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 Best Practices for Accounts Payable.
Upon successful completion of this course, participants will be able to:
- Identify issues related to vendor activity in accounts payable.
- Indicate problems that are likely to occur when vendor issues are not addressed in accounts payable.
- Cite the impact of current event changes into the ongoing accounts payable practices.
- Identify problems likely to occur if the potential for fraud is ignored in accounts payable.
- Identify issues related to proper and improper segregation of duties as they relate to the master vendor file.
- Cite issues of ownership related to the master vendor file.
- Cite controls needed around the master vendor file.
- Identify where problems occur when data entry isn't handled using a rigid coding standard.
- Cite reasons for the necessity of a regular cleansing of the master vendor file.
- Identify how to use the IRS TIN Matching program in the vendor setup routines.
- Cite problems created when vendor contact information is not collected and/or updated.
- Identify problems created when vendor credits are not identified and recovered on a regular basis.
- Identify how to create best practice routines to set up new vendors.
- Cite problems that may occur if new vendors are not verified before being set up in the master vendor file.
- Identify how to create procedures to collect information needed to evaluate critical vendors.
- Identify where responsibility for evaluating critical vendors should lie.
- Identify ways to improve vendor relations.
- Identify clues that will help identify potentially fraudulent invoices.
- Identify how to implement best practices that will help weed out fraudulent invoices.
- Identify master vendor file issues related to one-time vendors.
Table of Contents
Chapter 1 – Background
Scenario #1: The Worst Case
Scenario #2: The Average Case
Scenario #3: The Best Case
Chapter 1 Review Questions
Chapter 2 – Current Events Impact
Background: Issues Affecting Vendor Handling
Implications of the Data
Chapter 2 Review Questions
Chapter 3 – The Master Vendor File
Responsibility for Master Vendor File
The Ownership Quandary: Three Questions to Ask Before Requesting Ownership
Data in the Master Vendor File
Best Practice Overview
Best Practice: Controls
Chapter 3 Review Questions
Chapter 4 – Data Entry in the Master Vendor File
Best Practice: Data Entry
Best Practice: Cleansing the Vendor File
Best Practice: Entering Data
Best Practice: What Data?
Best Practice: Reports
Best Practice: TIN Matching
The Simple Test That Few Do
Best Practice: Departing Employees
Best Practice: Naming Convention
More about the Naming Convention
Vendor Taxpayer Identification Number (TIN) Issues
What Is TIN Matching
Reasons for Using TIN Matching
Misuse of TIN Matching
Using TIN Matching
Chapter 4 Review Questions
Chapter 5 – Vendor Contact Information
Vendor Contact Information
Change of Bank Account Requests
How Good Is Your Contact Information?
The Vendor Credit Issue: A Bigger Problem Than Most Imagine
How Credits Disappear
Quantifying the Problem: The Financial Impact on Your Bottom Line
A Word about the Unclaimed Property Issue
What You Can Do
Get Professional Help
What Your Vendors Are Doing with Your Money
Approach #1: Never Send a Check
Approach #2: New Orders
Approach #3: Sell Discontinued Products
Approach #4: Apply Open Credits to Disputed Invoices
Approach #5: Send Advising Letters to Purchasing
Chapter 5 Review Questions
Chapter 6 – Handling New Vendors
The Vendor Welcome Letter
The Welcome Kit
The Periodic Update
Chapter 6 Review Questions
Chapter 7 – Critical Vendors: Ensuring They’ll Be There When You Need Them
Planning Ahead: Gathering Information
Planning Ahead: Using the Data
Where Should the Responsibility Lie?
Chapter 7 Review Questions
Chapter 8 – Vendor Relations
Vendor Calls into Accounts Payable
Getting Information to Vendors: IVR/IWR
Five Ways to Improve Your Vendor Relations
When a Caller to AP Flips Out: Uncovering the Real Cause
Chapter 8 Review Questions
Chapter 9 – Vendor Fraud
Fraudulent Invoices—or Not
Solicitations That Look Like Invoices
Other Common Invoice Frauds
Fraud and Poor Payment Practices
A Word about Collusion
Upfront Vendor Verification
Control Challenge in Real Life
Who Is Confirmed
Why Front-End Verification Is Important
New Vendor Verification Guidelines
One Last Technique
Concluding Thoughts on Vendor Verification
Advice from the Better Business Bureau
Fraud in the Real World
Fraud through the Master Vendor File
Other Vendor Issues
One-Time Vendors in the Master Vendor File? Yes!
Pitfalls of Not Setting up One-Time Vendors
Vendors Who Refuse to Mail Invoices: New Best Practices for the Receipt of Invoices
Vendor Charges for Paper Invoices Got You Riled? Try These Five Tactics
Dealing with the Bully
Grin and Bear It
Chapter 9 Review Questions
Review Question Answers and Rationales
Choose Your Preferred Format
Get immediate access to a robust collection of learning and reference materials, allowing you to dive deep into the information you need. Our self-study materials are authored by top-quality, industry experts who focus on helping you grasp concepts quickly using real-life examples. Download your CPE to any device, and take it with you so you can learn when and wherever you want. Complete your CPE with an online exam, and enjoy instant grading with the option to print your certificate immediately upon passing.
Our self-study materials are authored by top-quality, industry experts. You’ll receive a bound notebook of all the course materials, shipped to you within one business day. In addition, you’ll also have full online access. Each self-study package includes a robust collection of learning and reference materials to help you cover the information efficiently and put it into practice immediately.
Experience high-quality instruction with our Self-Study Videos, available to you 24/7. With more than 80+ videos currently in the Western CPE Self-Study Video library, you can see and hear our expert instructors deliver the information you need in a dynamic way that allows you to immediately apply your learning. Unlike a live course or webcast, you can complete the course on your own time, playing and pausing as needed. Self-Study Videos allow you to complete your CPE requirements on your own time.
Back to top