Not only is the accounts payable department responsible for paying an organization’s bills, it is charged with only paying them correctly. This means guarding against duplicate payments as well as fraud. As those who work in or manage accounts payable are painfully aware, this is easier said than done. The cornerstone to an efficient, effective department is in the controls. Recognizing the importance of this topic to the accounting and accounts payable community, Anybill invited Mary Schaeffer, a nationally recognized accounts payable expert, to discuss this topic in detail. Ms. Schaeffer covered the following issues: Why every organization needs to concerned about controls Common control problems and weaknesses many organizations experience Solutions that will strengthen your controls.

1. Accounts Payable Efficiency:
It's All in the Controls
Mary Schaeffer
Publisher & Editorial Director AP Now
Author Controller & CFO’s Guide to Accounts
Payable + 15 other business books

2. Agenda
 Background
 Control Problems
 Solutions to Control Issues
 Closing thoughts
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3. Background
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4. What Do We Mean by Control ‘Issues’
 The processes that ensure:
 Efficient and effective operations
 Reliable and accurate reporting
 Fraud resistant operation
 Internal
 External
 Regulatory compliant
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5. Why Are Strong Internal Controls So
Important
 Stop duplicate pays
 Prevent/Deter/Detect Fraud
 Accurate Financial records
 Less likely to have IRS trouble
 S-Ox compliant
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6. Control Problems
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7. The Audit Trail
 Who did what
and when
 At the root of many
AP/Purchasing disputes
 Difficult in a paper world
 Passwords and User IDs help
 Weak audit trails – more fraud
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8. Password Sharing
• Sign of weak internal controls
• a few places: Firing offense
• What about short vacations
• A better approach
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9. Workarounds: A Better Way???
 What’s a workaround?
 Is it better?
 Will it create problems elsewhere
 Everyone or no one
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10. Signs of Weak
Policy and Procedures
 Not written down
 Each processor develops their own
workarounds or shortcuts
 No limits on the master vendor file
 One person doing more than one piece of
the P2P transaction
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11. Lack of Standardization
 No creativity when
processing invoices
 Everyone does it the same
 Data entry
 Invoice numbers
 Limitations imposed by system
 Key what you see
 Leading zeros
 Punctuation
 Names
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12. A Word about Management
Overrides
 Fix records
 Journal Entries
 Backup documentation
 Double sign off
 Can be fraud problem
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13. Promoting from within
 Great move
 What about their system access??
 How you know you have the problem
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14. Human Error
 Everyone makes mistakes
 Your controls should catch
 Don’t let it be a light bulb moment
 Many frauds start with an honest mistake
 Invoice submitted twice
 T&E: Item paid by corporate card and Reimbursed
on expense report
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15. The Biggest Problem with Weak
Controls
 Your employees know where your
weaknesses are
 Exploit those weaknesses
 The long term trusted
employee
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16. Control Solutions
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17. Newest Approach
Policy of Zero Tolerance
 Fraud
 Policy abuse
 Ethical breaches
 Fire
 Prosecute
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18. Set the Tone from the Top
 Corporate Culture
 Flows from the top
 Letter on T&E Policy
 No special treatment
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19. First Step: Segregation of Duties
 The collusion factor
 What happens with small AP
departments
 Bigger problem in the future
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20. Make Managers Responsible
 Look before they sign
 Consequences
 Firing - rare
 Part of annual review
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21. Visibility
 Does NOT mean unlimited
access for anyone who wants it
 Only as appropriate
 Remember SS # and TINs
 Ideally AP and purchasing simultaneously
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22. Centralize Receipt of Invoices
 One snail mail address
 AP
 bank
 One email
 Invoices@
 AP@
 One fax
 In AP for invoices only
 E-Fax
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23. Tracking Discrepant Invoices
 Why
 Duplicates
 Fraud
 In Excel or system
 Regular Follow up and reporting
 Aging
 The list no one wants to be on
 Analyze
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24. Standardization
Everything related to invoice processing:
 Procedures
 Written policy and procedures manual
 Data entry
 Invoice numbers
 Addresses
 Names
 Punctuation
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25. Policy and Procedures Manual
 Detailed
 Written
 Updated regularly
 Shared with everyone
 Can be used as a training manual
 Reference guide
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26. Invoice Automation
• Easiest way to incorporate
strong internal controls
throughout the process
• Easiest way to standardize
• Wave of the future
• No longer costs a small
fortune
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27. Big Benefit
Strategic – Accounts Payable
automation frees you and your
staff from mundane tasks, giving
you more time to focus on your
business.
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28. AP: Yesterday vs. Tomorrow
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29. How You Can Get Started
 Talk to peers
 Vendor demos
 Ask Anybill
 Email: info@anybill.com
 Call: 877-426-9245
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30. Thank you/Questions
Questions always welcome.
To share your thoughts and insights
Mary Schaeffer
 marys@ap-now.com
 302 836 0540
 Sign up for our free weekly ezine at
www.ap-now.com/ezinesignup.html
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31. 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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