Controller and CFO's Guide to Accounts Payable

258 Pages·2006·0.93 MB·English

by  Mary S. Schaeffer

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Controller and CFO’s
Guide to Accounts
Payable
Mary S. Schaeffer
John Wiley & Sons, Inc.
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Controller and CFO’s
Guide to Accounts
Payable
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Controller and CFO’s
Guide to Accounts
Payable
Mary S. Schaeffer
John Wiley & Sons, Inc.
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This book is printed on acid-free paper.
Copyright © 2007 by Mary S. Schaeffer. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
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Limit of Liability/Disclaimer of Warranty: While the publisher and author have
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Library of Congress Cataloging-in-Publication Data:
Schaeffer, Mary S.
Controller and CFO’s guide to accounts payable / Mary S. Schaeffer.
p. cm.
Includes index.
ISBN-13: 978-0-471-78589-7 (cloth)
ISBN-10: 0-471-78589-X (cloth)
1. Accounts payable. I. Title.
HF5681.A27S32 2007
658.15’26—dc22
2006016506
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
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For the three people I hope to meet in heaven (should by some
miracle, I make it through the pearly gates):
Richard Guillen, my nephew, who was taken from us far too soon
Ron Schacht, my dad, who I continue to miss, and
Thelma Schaeffer, my husband’s mother, who I never had
thepleasure of getting to know
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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
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Contents
Chapter 2 Invoice Handling 21
Three-Way Match 21
Common Invoice Problems and Solutions 23
Alternative to Three-Way Match:
Evaluated Receipt Settlement 36
Alternative to Three-Way Match:
Negative Assurance/Assumed Receipt 36
Statements 37
Paying from Statements 38
A Word about Credits 39
Getting Approvals 40
Stamping Mail in Accounts Payable 40
Electronic Invoicing 40
Bad Practices 43
Recommended Management Actions 43
Chapter 3 Payment Processing and Alternatives 45
Check Stock 46
Check Storage 47
Check Printing 48
Who Should Print Checks 49
Monitoring Check Stock Used 50
Between Printing and Mailing 51
Check Signing 52
Distribution of Checks 55
Mailing Checks 55
Difficulties Caused by Checks 56
Why Returning Checks Can Be a Problem 57
An End Run around the Returning Check
to Requisition Problem 58
Check Fraud 58
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