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Accounts payableAccounts payable is a file or account sub-ledger
that records amounts that a person or company owesto suppliers, but
has not paid yet (a form of debt), sometimes referred as trade
payables. When aninvoice is received, it is added to the file, and
then removed when it is paid. Thus, the A/P is a form of
credit that suppliers offer to their customers by allowing them
to pay for a product or service after it hasalready been
received.
In households, accounts payable are ordinarily bills from
theelectric company, telephone company,cable television or
satellite dish service, newspapersubscription, and other such
regular services.Householders usually track and pay on a monthly
basis by hand usingchequesor credit cards. In abusiness, there is
usually a much broader range of services in the A/P file, and
accountants orbookkeepers usually use accounting software to track
the flow of money into thisliability accountwhen they receive
invoices and out of it when they make payments. Increasingly, large
firms are usingspecialized Accounts Payable automation solutions
(commonly called ePayables) to automate the paperand manual
elements of processing an organization's invoices.
Commonly, a supplier will ship a product, issue an invoice, and
collect payment later, which describesa cash conversion cycle, a
period of time during which the supplier has already paid for raw
materialsbut hasn't been paid in return by the final customer.
When the invoice is received by the purchaser it is matched to
thepacking slip and purchase order, andif all is in order, the
invoice is paid. This is referred to as the three-way match.[1]The
three-way matchcan slow down the payment process, so the method may
be modified. For example, three-way matchingmay be limited solely
to large-value invoices, or the matching is automatically approved
if the receivedquantity is within a certain percentage of the
amount authorized in the purchase order. [2]
Expense administration
Expense administration is usually closely related to accounts
payable, and sometimes those functionsare performed by the same
employee. The expense administrator verifies employees' expense
reports,confirming that receipts exist to support airline, ground
transport, meals and entertainment, telephone,hotel, and other
expenses. This documentation is necessary for tax purposes and to
preventreimbursement of inappropriate or erroneous expenses.
Airline expenses are, perhaps, the most prone tofraud because of
the high cost of air travel and the confusing nature of
airline-related documentation,which can consist of an array of
reservations, receipts, and actual tickets.
[edit] Internal controls
A variety of checks against abuse are usually present to prevent
embezzlement by accounts payablepersonnel. Segregation of duties is
a common control. Nearly all companies have a junior
employeeprocess and print a cheque and a senior employee review and
sign the cheque. Often, the accountingsoftware will limit each
employee to performing only the functions assigned to them, so that
there is noway any one employee even the controller can
singlehandedly make a payment.
Some companies also separate the functions of adding new vendors
and entering vouchers. This makesit impossible for an employee to
add himself as a vendor and then cut a cheque to himself
withoutcolluding with another employee. This file is referred to as
the master vendor file. It is the repository ofall significant
information about the company's suppliers. It is the reference
point for accounts payable
http://en.wikipedia.org/wiki/Suppliershttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Invoicehttp://en.wikipedia.org/wiki/Credit_(finance)http://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Householdhttp://en.wikipedia.org/wiki/Electrical_power_industryhttp://en.wikipedia.org/wiki/Electrical_power_industryhttp://en.wikipedia.org/wiki/Telephonehttp://en.wikipedia.org/wiki/Cable_televisionhttp://en.wikipedia.org/wiki/Satellite_dishhttp://en.wikipedia.org/wiki/Newspaperhttp://en.wikipedia.org/wiki/Newspaperhttp://en.wikipedia.org/wiki/Subscriptionhttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Accountantshttp://en.wikipedia.org/wiki/Bookkeeperhttp://en.wikipedia.org/wiki/Accounting_softwarehttp://en.wikipedia.org/wiki/Liability_(accounting)http://en.wikipedia.org/wiki/Liability_(accounting)http://en.wikipedia.org/wiki/Cash_conversion_cyclehttp://en.wikipedia.org/wiki/Packing_sliphttp://en.wikipedia.org/wiki/Packing_sliphttp://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Accounts_payable#cite_note-0http://en.wikipedia.org/wiki/Accounts_payable#cite_note-0http://en.wikipedia.org/wiki/Accounts_payable#cite_note-1http://en.wikipedia.org/wiki/Expense_reporthttp://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=2http://en.wikipedia.org/wiki/Embezzlementhttp://en.wikipedia.org/wiki/Segregation_of_dutieshttp://en.wikipedia.org/wiki/Comptrollerhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Invoicehttp://en.wikipedia.org/wiki/Credit_(finance)http://en.wikipedia.org/wiki/Good_(economics)http://en.wikipedia.org/wiki/Service_(economics)http://en.wikipedia.org/wiki/Householdhttp://en.wikipedia.org/wiki/Electrical_power_industryhttp://en.wikipedia.org/wiki/Telephonehttp://en.wikipedia.org/wiki/Cable_televisionhttp://en.wikipedia.org/wiki/Satellite_dishhttp://en.wikipedia.org/wiki/Newspaperhttp://en.wikipedia.org/wiki/Subscriptionhttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Credit_cardhttp://en.wikipedia.org/wiki/Accountantshttp://en.wikipedia.org/wiki/Bookkeeperhttp://en.wikipedia.org/wiki/Accounting_softwarehttp://en.wikipedia.org/wiki/Liability_(accounting)http://en.wikipedia.org/wiki/Cash_conversion_cyclehttp://en.wikipedia.org/wiki/Packing_sliphttp://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Accounts_payable#cite_note-0http://en.wikipedia.org/wiki/Accounts_payable#cite_note-1http://en.wikipedia.org/wiki/Expense_reporthttp://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=2http://en.wikipedia.org/wiki/Embezzlementhttp://en.wikipedia.org/wiki/Segregation_of_dutieshttp://en.wikipedia.org/wiki/Comptrollerhttp://en.wikipedia.org/wiki/Suppliers
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when it comes to paying invoices.[3]
In addition, most companies require a second signature on
cheques whose amount exceeds a specifiedthreshold.
Accounts payable personnel must watch for fraudulent invoices.
In the absence of a purchase ordersystem, the first line of defense
is the approving manager. However, A/P staff should become
familiarwith a few common problems, such as "Yellow Pages" ripoffs
in which fraudulent operators offer toplace an advertisement. The
walking-fingers logo has never been trademarked, and there are
manydifferent Yellow Pages-style directories, most of which have a
small distribution. According to anarticle in the Winter 2000
American Payroll Association'sEmployer Practices, "Vendors may
senddocuments that look like invoices but in small print they state
"this is not a bill." These may be chargesfor directory listings or
advertisements. Recently, some companies have begun sending what
appears tobe a rebate or refund check; in reality, it is a
registration for services that is activated when thedocument is
returned with a signature."
In accounts payable, a simple mistake can cause a large
overpayment. A common example involvesduplicate invoices. An
invoice may be temporarily misplaced or still in the approval
status when thevendors calls to inquire into its payment status.
After the A/P staff member looks it up and finds it has
not been paid, the vendor sends a duplicate invoice; meanwhile
the original invoice shows up and getspaid. Then the duplicate
invoice arrives and inadvertently gets paid as well, perhaps under
a slightlydifferent invoice number.
[edit] Audits of accounts payable
Auditors often focus on the existence of approved invoices,
expense reports, and other supportingdocumentation to support
cheques that were cut. The presence of a confirmation or statement
from thesupplier is reasonable proof of the existence of the
account. It is not uncommon for some of thisdocumentation to be
lost or misfiled by the time the audit rolls around. An auditor may
decide toexpand the sample size in such situations.
Auditors typically prepare an ageing structure of accounts
payable for a better understanding ofoutstanding debts over certain
periods (30, 60, 90 days, etc.). Such structures are helpful in the
correctpresentation of the balance sheet as of year end.[4]
[edit] Accounts Payable Automation
ePayables are defined as the technology or process automation
solutions that automate any part of theaccounts payable ("AP")
process. The key to Accounts Payable Automation is to develop or
invest intechnology that will enable the company to free up labor
from task the techology can perform.Examples are opening mail,
scanning, entry in to the Accounting System or ERP System and
filing(4).
There are three main components AP Automation.
1. 100% Electronic Invoices2. Event Driven Workflow3. Reporting
Layer to Track all Actions
[edit] Accounts Payable Requirements [5]
1. Have years of Accounts Payable experience
http://en.wikipedia.org/wiki/Accounts_payable#cite_note-2http://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Yellow_Pageshttp://en.wikipedia.org/wiki/Ripoffhttp://en.wikipedia.org/wiki/American_Payroll_Associationhttp://en.wikipedia.org/wiki/American_Payroll_Associationhttp://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=3http://en.wikipedia.org/wiki/Accounts_payable#cite_note-3http://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=4http://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=5http://en.wikipedia.org/wiki/Accounts_payable#cite_note-4http://en.wikipedia.org/wiki/Accounts_payable#cite_note-2http://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Yellow_Pageshttp://en.wikipedia.org/wiki/Ripoffhttp://en.wikipedia.org/wiki/American_Payroll_Associationhttp://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=3http://en.wikipedia.org/wiki/Accounts_payable#cite_note-3http://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=4http://en.wikipedia.org/w/index.php?title=Accounts_payable&action=edit§ion=5http://en.wikipedia.org/wiki/Accounts_payable#cite_note-4
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2. High school diploma required, college courses in accounting
preferred3. Must have strong work ethics4. Must be well organized
and a self-starter5. Must be able to follow standard filing
procedures6. Detail oriented, professional attitude, reliable7.
Proficient in Excel and Word, 10-key by touch, Oracle experience a
plus
8. Ability to type 60-65 wpm9. Possess strong organizational and
time management skills10. Strong problem solving skills, basic
accounting principles knowledge, documentation
skills, research and resolution skills, data analysis and
multi-tasking skills11. Thorough knowledge of applicable accounts
payable/general ledger systems and
procedures, financial chart of accounts and corporate
procedures12. Ability to communicate effectively verbally and in
writing13. Ability to interact with employees and vendors in a
professional manner14. Ability to speak and write English and
Spanish fluently (a must)15. Ability to work independently and with
a team in a fast-paced and high volume
environment with emphasis on accuracy and timeliness16. Ability
to perform mathematical computations such as percentages,
fractions, addition,
subtraction, multiplication and division quickly and
accurately
