The New Accounts Payable Toolkit

SECTION 1 - INTRODUCTION 1 Chapter 1: About This Toolkit 3 Index of AP Tools 5 SECTION 2 - THE NEW AP DEPARTMENT 9 Chapter 2: The New AP Department 11 Introduction 11 Case Study: Journey to Excellence 11 Focus on Corporate Productivity 12 Accounts Payable and Procure-to-Pay (P2P) Process Improvements 13 AP Tool 1: AP Process Improvement and Automation Checklist 14 P2P Reporting, Understanding, and Perspective 15 AP Tool 2: Procurement Spend Analysis 16 Strategic Sourcing 17 Other Procure-to-Pay Best Practices 17 AP Process Improvement Impacts on Working Capital 18 Average Payable Period 18 Measuring Average Payable Period 18 When to Take a Trade Discount 19 Negotiating Payment Terms 20 Overview of the Requirements of the Sarbanes Oxley Act of 2002 23 Accounts Payable, Risk, and Fraud 25 Fraud Statistics 26 Introduction to Internal Controls 28 Standards of Internal Control 28 AP Tool 3: Types of Internal Controls 29 Defining Control Activities 31 Doxey700500_ftoc.indd 5 19-10-2020 13:31:57 The Three Critical Corporate Controls 32 AP Tool 4: The Benefits of Segregation of Duties (SoD) Controls 34 AP Tool 5: Mitigating Risk with Internal Controls 35 AP Tool 6: Compensating Controls to Mitigate Risk 38 AP Tool 7: Your Roadmap for Implementing an Internal Controls Program 40 AP Tool 8: The Top Twenty Controls for the AP Process 43 Benefits of a Payment Audit Process 45 AP Tool 9: Internal Controls Checklist 47 AP Tool 10: Sample Internal Controls Program for Accounts Payable for Companies Using the SAP ERP 47 AP Tool 11: Metrics to Drive Process Improvements 52 Chapter 3: Automating the AP Process 55 Introduction 55 Benefits of AP Automation 57 A Summary of AP Automation Functionality Considerations 57 Examples of AP Automation Solutions 59 Other Types of AP Automation 61 Imaging and Workflow Automation (IWA) 64 Different Flavors of Imaging and Workflow Automation 67 Electronic Invoicing 69 Different Flavors of Electronic Invoicing 72 Convergence of Electronic Invoicing and IWA 73 Implementation of Your P2P Automation Solution 74 Developing the Business Case 75 Software Solutions, Software-as-a-Service, or Outsourcing? 75 SECTION 3 - DISECTING THE P2P PROCESS 79 Chapter 4: What Is the P2P Process? 81 Introduction to the P2P Process 81 AP Tool 12: Dependencies and Interdependencies Within the P2P Process 83 Chapter 5: Transforming the P2P Process 85 Introduction 85 AP Tool 13: Current State Analysis 86 Visioning and Transformation Roadmap 87 AP Tool 14: P2P Transformation Roadmap 88 Doxey700500_ftoc.indd 6 19-10-2020 13:31:57 AP Tool 15: Other Recommendations for P2P Transformation 88 AP Tool 16: Managing Change 89 AP Tool 17: P2P Transformation Metrics 90 AP Tool 18: Streamlining Your P2P Process Without Automation 92 AP Tool 19: How to Begin Your P2P Automation Journey 96 Chapter 6: Structuring the AP Organization 99 Introduction 99 The Finance and Accounting Organization 100 The Finance and Accounting Organizational Chart (Example) 100 Organizational Chart for an AP Department (Example) 101 History of the Transition 101 About Shared Services 102 Organizational Chart for a Shared Services Structure (Example) 103 Shared Services and Service Level Agreements (SLAs) 103 SECTION 4 - HOW PROCUREMENT AND RECEIVING IMPACT AP 105 Chapter 7: Supplier Selection and Management 107 Introduction 107 Supplier Selection and Management Process Flow 108 Supplier Selection and Management Process Insights 109 AP Tool 20: The Top Ten Best Practices in the Supplier Management Lifecycle 109 AP Tool 21: Five Steps to Use When "Fine-Tuning" Your Supplier Master 115 Another Look at Supplier Master File Management Best Practices 120 AP Tool 22: Supplier Diversity 124 AP Tool 23: Eight Critical Supplier Master Practices 128 AP Tool 24: Managing the Supplier Master File 130 Standards of Internal Control: Supplier Selection and Management 131 Chapter 8: Contract Management 135 Introduction to the Contract Management Process 135 Contract Management Process Flow 137 Contract Management Process Insights 138 AP Tool 26: Ten Recommendations for Establishing Contracts 142 Standards of Internal Control: Contract Management 147 Chapter 9: Purchasing and Ordering 151 Introduction to the Purchasing and Ordering Process 151 AP Tool 27: Five Steps in an Electronic Procurement Process 152 Purchasing and Ordering Process Flow 154 Purchasing and Ordering Process Insights 155 AP Tool 28: Four Best Practices to Consider for the Purchase Requisition Process 157 The Catalog Procurement Model 158 Standards of Internal Control: Purchasing and Ordering Process 163 Chapter 10: Receiving 179 Introduction to the Receiving Process 179 Receiving Process Flow 180 Receiving Process Insights 181 Standards of Internal Controls: Receiving Process 184 SECTION 5 - A LASER FOCUS ON AP 193 Chapter 11: The Supplier Master File 195 Introduction to the Supplier Master Process 195 AP Tool 29: Supplier Master File Process Best Practices 196 AP Tool 30: Supplier Master Coding Standards 214 Standards of Internal Control: Supplier Master 218 Chapter 12: Invoice Processing 231 Introduction to Invoice Processing 231 Invoice Processing Process Flow 232 Insights into Invoice Processing 233 Types of Matching Processes 235 Automating the Matching Process 236 AP Tool 31: Establishing Tolerances 237 AP Tool 32: Five Factors Driving the Automation of Invoice Processing 239 The Benefits of Sending and Receiving Electronic Invoices 240 AP Tool 33: The Most Common Forms of Invoice Automation 241 AP Tool 34: Six Best Practices for Invoice Processing 244 AP Tool 35: Three Components of Imaging and Workflow 248 AP Tool 36: Nine Performance Indicators for Invoice Processing 249 AP Tool 37: The 25 Top Reasons for Problem Invoices 251 Standards of Internal Controls: Invoice Processing 254 Chapter 13: P-Cards 261 Introduction to the P-Card Process 261 Types of Payment Cards 262 P-Card Definitions 266 AP Tool 41: The P-Card Scorecard 278 Standards of Internal Controls: P-Card Process 284 Chapter 14: Travel and Entertainment 289 Introduction to the T&E Process 289 AP Tool 42: Red Flags for the T&E Process 293 Standards of Internal Control: T&E Process 297 Chapter 15: The Payment Process 303 Introduction 303 AP Tool 43: Effectively Managing Your Payment Process 306 AP Tool 44: Five ACH Controls 307 AP Tool 45: Preventing Duplicate Payments 308 AP Tool 47: Tackling Payments Fraud 317 Chapter 16: Accounting, Reconciliation Processes, Self-audit Tools, and Internal Controls 325 Introduction 325 Standards of Internal Controls: Accounting, Reconciliation Processes, Self-Audits, and Internal Controls 334 Chapter 17: Customer Service 343 Introduction 343 Standards of Internal Controls: Customer Service Process 347 Chapter 18: Reporting, Analytics, and Benchmarking 351 Introduction 351 Standards of Internal Control: Reporting, Analytics, and Benchmarking Process 361 SECTION 6 - OTHER AP BUSINESS PROCESSES 365 Chapter 19: Supply Chain Financing (SCF) 367 Introduction 367 Unlocking Supply Chain Value 368 Doxey700500_ftoc.indd 9 19-10-2020 13:31:57 Chapter 20: Escheatment 371 Introduction 371 Uniform Unclaimed Property Act (the 2016 Act) 372 Trends in Unclaimed Property Audit and Compliance Issues 372 The Three Objectives of Unclaimed Property Laws 374 Chapter 21: Sales and Use Tax 381 Introduction 381 What the Wayfair Decision Means for Out-of-State Sellers 382 Chapter 22: Independent Contractors and the 1099 Process 393 TIN Matching and 1099 Filers 393 Chapter 23: Business Continuity Planning 411 Introduction 411 How COVID-19 Is Impacting Today's Business Environment 412 Business Continuity Basics 412 The Difference Between Disaster Recovery and Business Continuity 413 Other Definitions and Terms 413 Managing a Crisis 414 Accessing the Risk and Developing a Strategy 415 Taking Business Continuity to the Cloud 415 How to Ensure Continuous Business Continuity 416 AP Tool 56: Six BCP Best Practices 417 AP Tool 57: A Roadmap for Developing Your BCP 418 AP Tool 58: Five Recommended BCP Internal Controls 419 SECTION 7 - INTRODUCTION 421 Accounts Payable: Quarterly Controls Self-Assessment Questionnaire 423 Glossary 427 Index 451