Accounts Payable Document Control Procedures
Document control procedures are critical for processing accounts payable invoices. They will help ensure that you properly record all accounts payable invoices to the accounting general ledger and process payments for the invoices in a timely manner. A written procedure for processing accounts payable helps to alleviate mistakes in processing and to avoid late charges for failure to remit payments on time.
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Date-Stamp the Invoice
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The person responsible for opening the daily mail should date-stamp each accounts payable invoice received with the current day's date. Date-stamping allows you to track the amount of time it takes to pay an invoice at your company. The person date-stamping the invoices should note any significant time differences between the invoice issue date and the date received. Invoices mailed weeks after generation may need to be pushed through the accounts payable process quickly to avoid late charges.
Code the Invoice
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The employee responsible for creating or managing the expense writes the code for the appropriate general ledger account on the invoice and compares the invoice to the remaining budget for that expense account. If the general ledger account will be over the budgeted amount once you process the invoice, the employee should include an explanation for the overage to the invoice.
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Obtain Invoice Approval
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Managers are responsible for reviewing and approving all accounts payable invoices that fall within their area of control. The manager reviews the coding on the invoice for accuracy and any explanation of budget overage for thoroughness. The manager then initials and dates the invoice so that the accountant knows the manager has approved the invoice for payment.
Prepare the Check
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The accountant reviews the invoice to ensure the proper approvals and explanations for overages are included on the invoice. The accountant also double-checks the coding on the invoice and questions any coding that appears to be in error. Once the accountant is satisfied with the approval and coding of the invoice, he prepares a check for payment.
Business checks should include two check stubs: a check stub for the issuer and a check stub for the recipient. The check stub should include the date of the invoice, the invoice number and the business account number, if the vendor assigned one. The issuer check stub may include the general ledger coding if desired. Make a copy of the invoice for your own records and staple the issuer check stub to the top of the invoice. File the invoice copy to support the expense in case of an audit or for accounting research.
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References
- Photo Credit Blue pen in front of invoice image by millann from Fotolia.com
