Accounting Best Practices, Fifth Edition

Total Impact of Best Practices on the Accounts Payable Function

The preceding list of accounts payable best practices is too voluminous and overlapping for a company to install all of them—in fact, there is no need to do so. If a small number of the most radical changes are implemented, such as using the receiving personnel to approve payments to suppliers, many of the other practices are rendered ineffective. Accordingly, this section does not attempt to describe the impact of all the best practices. Instead, it assumes that all of the changes requiring considerable reengineering are implemented, since they have the most impact on the efficiency and effectiveness of the department. This leaves a much smaller number of additional best practices to be tacked on to make a truly world-class accounts payable function.

As just noted, the most important and far-reaching item to install is approval of payment at the receiving dock by the receiving staff. This best practice negates a number of incremental improvements to the accounts payable function, such as automated three-way matching and digitizing accounts payable documents. Once that improvement is made, the remaining best practices for the new accounts payable functions are primarily those that deal with special payment situations that will not be routed through the receiving dock. For example, expense reports and repetitive payments should be automated. The number of payments can also be reduced by using procurement cards to consolidate ...