Here Are 5 Payment Controls That You Really Need In Accounts Payable
Payment controls give your accounts payable department a fighting chance against fraud. They also give you the oversight and tools you need to stop losing money in other ways, such as through late-payment fees.
Implementing payment controls is easy with an automated AP system. Here are five payment controls that you need in accounts payable. All of them are easy to implement using an automation system.
Don’t pay an invoice until you can prove that it’s genuine. You want to be able to match the invoice to a purchase order and, if applicable, a goods received document. Something like utilities bills won’t require 3-way matching, but when you’re dealing with inventory you want to make sure the PO, received goods, and invoice all match. A system like NextProcess can check this automatically.
Often, fraudsters try to slip fake invoices in just under the approval thresholds hoping no one will notice. An automated system can check for invoices that are close to the threshold and make sure they’re legitimate. Automation also makes it easier to check that you’re only authorizing legitimate payments. Since the system has already matched invoices to purchase orders and it records each step of the process, it’s easy to glance over an approval request and make sure it meets all the requirements.
In a manual system, it’s pretty much inevitable that errors show up in spreadsheets, invoices get lost for a while and then paid late, and that duplicate payments will slip through. Automated checks in a system like NextProcess’s AP software take care of all these problems. These controls are included in the software. They’re also easy to customize and are one of the simplest ways to take charge of your accounts payable.
Segregation of Duties
You want to make sure that no one person is responsible for overseeing every step in the payment process. Giving a single employee total autonomy over money going in and out of your company just doesn’t make sense. Different people should be in charge of starting the payment process, handling exceptions invoices, and issuing approvals (for example).
If you’re paying by check, it’s a good idea to have one person prepare checks and a different person sign them. You also have to make sure the checks are kept in a secure location. And because electronic payments are becoming so popular, you’ll need to secure digital payments as well. One solution is to outsource payment processing, which can actually help you strengthen your internal controls.
NextProcess’ software gives you the tools needed to empower your employees and automatically enforcing your payment controls. If that sounds like something you want, contact us today to schedule a free demo and see just how much our software can help your business.