Transitioning to a paperless Accounts Payable

I manage Shared Services for an advertising company. Each agency in the network has a lot of autonomy and any changes to the process have to be "bought in" by all CFOs.

Recently we have implemented Accounts Payable workflow process, where invoices are converted into pdf documents and routed for approval in the system (PeopleSoft). Now I want to introduce couple of changes related to the paper documents: first to stop check matching (that is matching hardcopies or originals of the invoices to the copy of issued check) and to stop filing the original paper documents, as we have a pdf version of that document. Both these proposals have met with resistance from my stakeholders. They perceive it as a weakness of internal controls and want something official from our auditors (Deloitte) or some other authoritative body claiming that it's OK to stop matching.

Not surprisingly, Deloitte refused to comment on the process, claiming it’s a management decision and they would not opine on it. It’s been so long that I have worked in any organization that was matching checks that I am at a complete loss on where to find the information that this is obsolete process. Does anybody have a similar experience or has an advise on how to proceed?

Also, I would welcome any comments from the people who currently use the AP workflow products regarding the handling of the original paper documents that are received from vendors?

Answers

Bryan Frey VP Finance/Corp Controller • Aug. 26, 2010

The reason that most (okay, you guys do it :), but most don't) companies don't do this is because they have become satisfied that it is not necessary, typically through internal analysis. At this point it's so commonplace in paperless environments that I have run that noone questions it.

If you could do a statistical analysis and show 100% compliance over a period of time (perhaps you are already sitting on that data) then you would have ammunition for stopping the manual check checking (sorry, couldn't resist) process.

And Deloitte is right, that is not something any accounting firm would opine on. However, there are probably process or mgmt consulting firms you could hire to do the same analysis I note above or to weigh in on your current process, but would cost $, and without hard numbers it still may not convince your stakeholders.

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Transitioning to a paperless Accounts Payable

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