Updated September 2011
Accounts payable, managers end of month check – Operational Procedures
1 Introduction
The accounts we pay at the end of the month and the payments we make throughout the month, summarise a big part of the total activities that occur throughout each day at the nursery.
You must learn to understand these documents and then thoroughly check them at the end of each month so you can control the flow of goods into the nursery and payment for them.
Delivery dockets, invoices and statements can be fairly difficult to understand but if you put the work into them and then follow up when necessary with staff you should be able to significantly reduce our costs be reducing overbuying and staff fraud, improving buying price and stopping duplicate payments.
Every payment must be checked by you whether it is on account or has been paid cash on delivery.
Rules for the monthly payments check:
1. The bigger the payment, the more time you spend and the more meticulously you look at the invoice.
2. Check that the payment, invoice or account is for the current month. If the payment is for a past month think about it harder.
3. If there is no original copy, (eg there is a faxed copy) check that it has not been paid elsewhere.
Be careful of duplicate payments where company trades under two names
At some time we are going to be defrauded by a supplier, if you find mistakes on invoices in adds or if you see any other possibility of fraud on any invoice random check a few earlier invoices
Apart from being familiar with the accounts payable clerks job description you should pay attention to the following points.
2 Overbuying
A quick scan of the invoices can back up your observations of what is actually on the bench or gondola. If the buyer can reorder every week he should not be ordering more than he can sell in a couple of weeks unless the purchase can be justified by buyer, eg. Making up an order or good buy. If you work on the buyers with the information provided in the accounts you can head off excessive stock levels before they become apparent as a problem.
3 Staff fraud
The staff who are likely to test the system are going to be tempted to put things on our account. The areas that are traditionally a problem are petrol, our maintenance and office suppliers (eg Danahers, Danks), and suppliers of products that can be used at home. Check signatures for the goods picked up from Danahers etc. and make sure they include only materials that we have used on our site.
All materials used at the nursery for construction or displays or purchased by staff need to be recorded in the staff orders/nursery consumables invoice book.
Subcontractors have put materials on our account for their own jobs so be meticulous in this area. If you have checked what materials have been used for with someone who may be tempted they will probably be deterred because you have given the impression you know what is going on.
4 Buying Price
Check that your buyers are buying good quality products at the right price and not from the easiest supplier to order from or from a friend. If you notice we are buying significantly bigger quantities from a supplier, think of asking for a better price. Use the information from the invoices to discuss buying price with your buyers.
5 Selling price
You have to do periodic spot checks of the retail price of products on the shelf because staff will become complacent and not check invoices for cost price increases.
Suppliers will also put their prices up without notification. The yard is an area where price increases can be overlooked if you are not careful.
6 CODS
When you finish one letter of the alphabet with the statements check the corresponding letter for the invoices already paid, make sure there are no duplications of payment and check the detail on the invoice.
7 Deadlines
Be up to date. Periodically check your accounts payable clerk’s tray to ensure that their are not problems being left at the bottom the tray.
8 Bank Funds
MAKE SURE WE HAVE ADEQUATE FUNDS IN THE BANK BEFORE YOU SEND OUT THE END OF THE MONTH ACCOUNTS OR ANY SUBSTANTIAL AMOUNTS OF MONEY.