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Year End in Accounts Payable: Getting Rid of
Some of the Stress
Mary SchaefferPublisher & Editorial Director AP NowAuthor The Controllers’ & CFOs’ Guide to Accounts Payable + 15 other business books
Agenda
BackgroundThe Headaches
The ProcessYour PeopleThe Big Picture
Some solutions that address multiple “issues”
Closing Thoughts
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer2
IntroductionYear End
Financial close and extra workHoliday celebrationsEmployees shopping Employees want time off
Budget has usually been completedRecipe for tension, trauma and disaster
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer3
The Process
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer4
Accruals
As low as possibleAlways an estimate
Who does themAPDepartmentsAccounting
How to avoid double counting
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Discrepant InvoicesShould be included in accruals if not
paidBut for how much???
Push to get them resolvedRemember, vendors are probably
cleaning up their ARReceptive Some will use outstanding credits to
cover
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Outstanding InvoicesIf invoices not received first in AP or an
automated system used, this can be a huge problem
Invoices come out of the woodworkMore volume
What’s awaiting approval?What are your processors holding that hasn’t
been entered? How are your worst performers stacking up
After year end, go through the numbers and see which of your processors put through an inordinate number of invoices and find out why
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Outstanding Expense ReportsEveryone’s favorite
Last minute – 6-12 months of expense reportsRemember IRS guidelines for accountable
plan
Keep a list for next yearSet a policyTalk to the laggards’ supervisorsRemind them early next year
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The Last Check RunDo you have everything?Are you printing some checks but not
mailing them???Will you have a second “last” check run?Do you hold items for the following year? When are you printing? Did you leave enough time to stuffing and
adding backup – if you do that?Did you leave enough time to get a manual
signature, if that is required?© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer9
Last Check Run: Partial Solution
Two check runsOne for the mailOther for special handling
Of course, many of these problems avoided with ACH
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Vendors Who Didn’t Get PaidVendor needs payment on books by year
endCheck really is lost in the mailMad dash to
Put a stop payment on the first payment
Issue a new checkPossibly even overnight the item
Pay electronically© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer11
Cut-off Dates Earlier than in non-close months Last minute rushes – there will be many! Despite all your efforts to publicize, a few
will still show up on the standard cut-off date
Publicize – far in advance Start in October, and REPEAT Send to anyone who might be affected
Unofficially keep the books open an extra day If this begins known, some won’t take the
published cut-off as real© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer12
The CalendarList everything on it
TaskDue date Parties responsibleWhen they were notified When task was completed
Track who did what whenNote any problemsSave for next year, review and adjust © 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer13
The People Issues
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The Fight for Time off: Staff Vacation TimeThe real kick: the plant is closed but
accounting has to come in
Extra work with several vacation days but
People want time to spend with family so
Solomon’s Call: Who gets the time offWho puts in for it firstSeniority Who’s got time left
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer15
Staff Vacation Time: Some Partial Solutions
Plan far ahead of time … possibly even at the beginning of the year
Share – Thanksgiving, Christmas, Easter week, 4th of July week, Fridays in the summer etc.
Keep track from year to year
But don’t let critical tasks slideRemember ACH fraud and the 24 hour bank
notification period© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer16
The Mandatory Overtime Battle
It happensPart of being considered a professional
Sometimes makes for a grumpy staffPizza lunches/dinners; bagels; donuts Build camaraderie
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The Big Picture Issues
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The Use It or Lose It Dilemma Budget
Improve morale Small bonuses – a long shotArtwork Lunch – staff appreciationEducational initiatives
Vacation timeKnow the company policyTrack it and update employees –early in the game
Carry over for one-three months
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The Last Mile: Collecting 1099 Information at the Last MinuteTIN MatchingWaiting until year end to verifyOnly slightly better than not usingStill have to track down
Use TIN Matching – before first payment is made
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Window Dressing: Financial StatementsMaking the balance sheet and income statement look good
What AP can do:Recover unclaimed property – if currently reporting
Reclaim open credit from vendorsDuplicate payments – beef up your routines
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Solutions: To Fix Multiple Problems
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Solution #1: Get Rid of the Paper
InefficientGets lost and damaged
In the mailIn your company
No audit trail
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Solution #2: Utilize Best Practices
Eliminates some of the problemsMissing TINGetting expense reports on time
Sets the stage for use of best practices through the close
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Communicate, Communicate, Communicate
With all affected partiesDon’t rely on managers to share
informationEarly and oftenSend reminders
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Set Reasonable ExpectationsBoth with your boss and your staff
Days off, overtime etc.Don’t be persuaded to agree to
unrealistic deadlinesYou’ll probably failYou’ll increase the stress level
Under promise, over deliver
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Track Problems Create a notes section on your
calendar WhoWhat Why
How could it have been avoidedMake notes – you won’t remember next year
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer27
Pay Electronically
Cost effectivePayment timingAll rush payments electronic
Less stress Payments can’t get lost
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer28
E-Invoicing
Everyone has access to the information almost simultaneouslyEnds the finger pointingElectronic audit trail Easily resent or shared
Third party or email
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Automate the Entire Accounts Payable Process
Eliminates many of the issues Okay – not the time off issue
Removes the stress−all year round
Consider it for next yearPut getting a demo at the top of your To-Do list for next year
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer30
Where to Get a DemoAsk Anybill
Email: info@anybill.comCall: 877-426-9245
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer31
Thank you/Questions
Questions always welcome.To share your thoughts and insights
Mary Schaeffermarys@ap-now.com
302 836 0540
Sign up for our free weekly ezine atwww.ap-now.com/ezinesignup.html
© 2012 Accounts Payable Now & Tomorrow and Mary S. Schaeffer32
About Mary Schaeffer Mary Schaeffer is a nationally recognized accounts payable expert. Following a career
in finance she turned to writing and consulting. For the last 15 years she has been researching and writing newsletters for the accounts payable profession. Currently she is the Editorial Director & Publisher of Accounts Payable Now & Tomorrow, (www.ap-now.com) a fee-based newsletter published by CRYSTALLUS, Inc.
She also handles most of the firms consulting assignments (focused primarily on AP issues) often working with other well-regarded professionals. Her blog, at http://ap-now.com/blog/ is read by over 15,000 professionals each month.
Ms. Schaeffer is the author of over 15 business books including The CFO and Controllers’ Guide to Accounts Payable and the recently published Fraud in Accounts Payable: How to Prevent It. John Wiley & Sons is the publisher of most of her books.
She also is a regular contributor to the AICPA’s Corporate Finance Insider.
Ms. Schaeffer has a BS in Math from York College (CUNY) and a MBA in Finance from New York University.
She can be reached at marys@ap-now.com
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