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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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3–33. Eliminate Manual Checks

The accounts payable process can be streamlined through the use of many best practices that are listed in this chapter; however, a common recurring problem is those payments that go around the entire preplanned payable process. These are the inevitable payments that are sudden and unplanned and that must be handled immediately. Examples are payments for pizza deliveries, flowers for bereaved employees, or cash-on-delivery payments. In all of these cases, the accounting staff must drop what it is doing, create a manual check, get it signed, and enter the information on the check into the computer system. To make matters worse, due to the rush basis of the payment, it is common for the accounting person to forget to make the entry into the computer system, which throws off the bank reconciliation work at the end of the month, which creates still more work to track down and fix the problem. In short, issuing manual checks significantly worsens the efficiency of the accounts payable staff.

One can use three methods to reduce the number of manual checks. The first method is to cut off the inflow of check requests, while the second is (paradoxically) to automate the cutting of manual checks. The first approach is a hard one, since it requires tallying the manual checks that were cut each month and following up with the check requesters to see if there might be a more orderly manner of making requests in the future, thereby allowing more checks to be issued ...

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