From time to time, most people who work in accounts payable run into a smart-aleck who demands to know “what's the big deal about accounts payable?” These folks think that an effective accounts payable process is one where someone sits at a desk and simply writes checks for any invoice that crosses their desk. As those who work in the function know only too well, this practice would be a recipe for disaster. Here's a look at what could go wrong should an organization be foolish enough to follow such a practice.
Reason #10: The organization would end up paying many invoices twice.
Reason #9: The organization would be hit with more fraud.
Reason #8: As long as the organization would be less profitable.
Reason #7: When best practices are not followed, payments are typically delayed. This does not sit well with vendors.
Reason #6: While best practices result in an efficient accounts payable function, the reverse is true when best practices are ignored.
Reason #5: Inefficient processes lead to increased expense for the accounts payable function. This may come in the form of extra staff, lost early payment discounts or late fees.
Reason #4: While most would like to forget about the
Reason #3: Often times, not employing best practices results in inaccurate information which trickles down to the financial statements resulting in inaccurate financial statements.
Reason #2: Inaccurate financial statements and financial reporting can lead to trouble for executives relying on faulty financial information for business decisions.
Reason #1: If everything discussed so far has not been enough to convince you that best practices are a necessity, consider the following. By not using best practices across the entire accounts payable function you could be courting trouble with the IRS and state taxing authorities.
Mary S. Schaeffer
AP Now
www.ap-now.com