Best Practice in Accounts Payable

For more than 15 years, Westgate Moore have worked alongside many accounts payable functions, locating and recovering all aspects of payment errors that have been made to suppliers, and in the process, recovering millions of pounds of lost revenue from suppliers that Accounts Payable functions didn’t know had been lost due to payment errors.

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But why do these payment errors occur?

The vast majority of payment errors made to suppliers in accounts payable occur due to human error, which is an inevitability considering the transaction intensive environment that is AP. Typically internal controls are breached within an ERP which allows the payment errors to occur; be it a duplicate payment due to duplicate invoices being in circulation and there being multiple vendor codes for that particular supplier.

The AP market place is now flooded with solutions promising to eradicate any payment errors ensuring 100% of transactions are made correctly and to the correct supplier. This just isn’t, and can never be the case. There is always a ‘random’.

As advocates for best practice within Accounts Payable, we believe that following certain practices can help reduce NOT eradicate payment errors, and utilising particular solutions, payment errors can be located and recovered.

Procedure and company policy

Creating a procedure and company policy for entering supplier invoices, especially copy invoices

Bi-annual reviews

Bi-annual reviews of supplier master file – to help remove those duplicate vendor accounts

Periodic reviews

Periodic reviews of transactional data, in the form of a recovery audit

Reconcile statements

Reconcile statements – the bain of AP – but reconciliations MUST occur – a recovery auditors hidden secret is that this is where a large proportion of recoveries can be found

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