Controller and CFO's Guide to Accounts Payable

Refreshingly candid and witty in tone, Controller and CFO's Guide to Accounts Payable is required reading for any professional wanting to understand more about their organization's AP operations. It declares that AP is no longer a back-office function and underscores the reality that proper attention must be paid to this crucial department in order to run a leading edge and competitive company.

Table of Contents:
Preface xv PART I CORE FUNCTIONS 1 Chapter 1 Internal Controls in Accounts Payable 3 Ignore Accounts Payable at Your Own Peril 4 The Fraud Problem 5 State Auditing Groups 6 Sarbanes-Oxley Impact 7 A Marriage Made in Heaven-Not! 7 Ideal Accounts Payable Function 8 "When the Invoice Arrives" 9 Segregation of Duties 11 Control on Payment Types 12 Other Payment Type Control Issues 13 Often-Overlooked Issue: Spreadsheets 14 Spreadsheet Control Plan 15 Policy and Procedures Manual 16 Bad Control Practices 18 Recommended Management Actions 19 Chapter 2: Invoice Handling. Three-Way Match. Common Invoice Problems and Solutions. Alternative to Three-Way Match: Evaluated Receipt Settlement. Alternative to Three-Way Match: Negative Assurance/Assumed Receipt. Statements. Paying from Statements. A Word about Credits. Getting Approvals. Stamping Mail in Accounts Payable. Electronic Invoicing. Bad Practices. Recommended Management Actions. Chapter 3: Payment Processing and Alternatives. Check Stock. Check Storage. Check Printing. Who Should Print Checks. Monitoring Check Stock Used. Between Printing and Mailing. Check Signing. Distribution of Checks. Mailing Checks. Difficulties Caused by Checks. Why Returning Checks Can Be a Problem. An End Run around the Returning Check to Requisition Problem. Check Fraud. Positive Pay and Its Cousins. P-cards. Wire Transfers. ACH Payments. What Every Company Needs to Know to Avoid Making Payments to Terrorists. Chapter 4: Exception Processing. Check Problems: Exception Processing Heads the List. Typical Rush Check Scenario. Background on Rush Checks. Ways to Minimize the Number of Rush Checks. Positive Pay Issue. Why Returning Checks Can Be a Problem. Need Checks Returned: Here's a Policy You Can Use. Audit Point. Petty Cash Box. Chapter 5: Duplicate and Erroneous Payments. The We-Never-Make-a-Duplicate-Payment Myth. Duplicate-Payment Hypocrisy. Policy. In-house Checking: Before the Payment Is Made. In-house Checking: After the Payment Is Made. A Word about Software. Why Duplicate Payment Audit Firms Are Needed. Hiring a Postaudit Firm. Second Postaudit. Word of Caution. Overall Action Plan. Chapter 6: Vendors, Vendor Relations, and Master Vendor File. Vendor Relations. What Is the Master Vendor File? Responsibility for the Master Vendor File. Who's In and Who's Not? Handling Inactive Vendors. Cleansing the Master Vendor File. Fraud Through the Master Vendor File. Vendor Welcome Letter. New Vendor Applications. Access to the Master Vendor File and Making Changes. Review of Changes. The Spot-Check Annual Review. Master Vendor File Standards 99 Coding Standards 99 Coordination with Invoice Coding Standards 101 Vendor Calls into Accounts Payable 101 IVR/IWR 102 Segregation of Duties 103 Contract Compliance 103 Contents ~fm01-4705.qxp 8/17/06 9:58 AM Page x FOR SCREEN VIEWING IN DART ONLY xi Chapter 7 Discounts and Deductions 105 Lost Early-Payment Discounts 105 The First Problem 106 Another Dirty Secret 107 To Take the Discount or Not 108 Disputes: Effects on Payments and Relationships 109 Tracking Disputed Invoices 109 Electronic Invoicing Dramatically Improves Invoice Handling 110 Online Dispute Resolution Programs 110 Invoice Amnesty Day 111 Explaining Deductions 111 Special Deals 112 Late Fees 113 PART II SPECIALTY FUNCTIONS 115 Chapter 8 Travel and Entertainment 117 T&E Policy 117 Equality under the Policy and Sarbanes-Oxley 118 Reimbursement Issue 119 Issues to Be Addressed in Your T&E Policy 119 Timely Submission of T&E Reimbursement Requests 121 T&E Practices: Spot-Checking and Cash Advances 123 T&E Reimbursement Request 123 Advantages of ASP (Online) Models 124 Contents ~fm01-4705.qxp 8/17/06 9:58 AM Page xi FOR SCREEN VIEWING IN DART ONLY xii T&E Fraud: Don't Let Your Employees Pull the Wool over Your Eyes with These T&E Tricks 124 T&E Fraud: The Gift Card Problem 130 Chapter 9 Unclaimed Property/Escheat 135 What's Required 135 Legal Oversight 136 Timing of Reporting 136 Unclaimed Property: An Unending Process 137 Unclaimed Property Dilemma for Those Currently Not in Compliance 142 Chapter 10 Use of Purchasing Cards 147 Control Features 147 Payment Terms 149 Rebates 150 Expanding Your Program 150 Issues 151 Payment 153 Departing Employees 154 1099s 154 Chapter 11 Independent Contractors, 1099s, and 1042s 157 Workable TIN Policy 158 What if the Information Provided Is Wrong? 158 Independent Contractor versus Employee 159 Keeping Up to Date 161 IRS's TIN Matching Program 161 Making Payments to Foreign Individuals 164 Payments to Terrorists 166 Chapter 12 VAT Reclaim and Other International Considerations. Countries Allowing VAT Reclaim. What Can Be Reclaimed? Outsourcing. Chapter 13 Sales and Use Tax. Definition of Sales and Use Tax. Some Terminology. Nexus. What to Expect in an Audit. Tougher Audits. Help with Your Sales and Use Tax Issues. PART III MANAGEMENT AND OVERSIGHT ISSUES. Chapter 14 Fraud: Check, Employee, and Vendor. Check Fraud. Demand Draft Fraud: The Latest Form of Check Fraud. Employee Fraud. Segregation of Duties. Desktop Computers: Handle with Care. Phony Vendors. Upfront Vendor Verification. Chapter 15 New Technology Initiatives. Imaging and Workflow. Electronic Invoicing. Forward-Thinking Functionality. Electronic Payments. B2B ACH Payment Awareness and Usage in the Middle Market. UPICs. IVR/IWR. Conclusion. Chapter 16: Cash Management Initiatives. Cash Management Initiatives. Clean Desk Syndrome. Scheduling Payments. Payment Timing: Is It Stretching or Timing? Conclusion. Chapter 17: Sarbanes-Oxley and Certification. Overview of the Act. Management Assessment of Internal Controls. Auditors' Assessment of Internal Controls. Audit Trails. Records Retention. Policy and Procedures Manual. Segregation of Duties. Eliminate Really Bad Accounts Payable Practices. Monitoring Reports. Real-World Observations. Index.

About the Author :
MARY S. SCHAEFFER is a nationally recognized accounts payable expert. She is the founder and Editorial Director of Accounts Payable Now & Tomorrow, a newsletter for professionals interested in payment issues. She is the author of twelve books and has written hundreds of articles that have appeared in publications such as The New York Times, Corporate Cashflow, Treasury and Risk Management, Business Credit, The Writer, and Newsday. She has an MBA in finance and is a member of the New York Financial Writers' Association.