2010 Accounts Payable Survey

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2009 - The year in AP

A year which started with economic storm clouds brewing , has seen those clouds continue to gather pace and we find ourselves in the midst of the most uncertain economic situation in living memory.  In the UK,  an already unsettled situation has been compounded by the furore surrounding the increasing public distrust in the Parliamentary system.


Now more than ever, it is important to keep a close eye on all the processes within AP departments.  As this area is the predominant one where an organisation can leak money – it is also the key area where management are likely to need reassurance that resources are not being wasted and that best practice is being adhered to.


Unfortunately the accounts payable department is particularly susceptible to fraud, and although it’s safe to say that 99% of the time employees , suppliers and contract workers are trustworthy, it is also true to say that in times of economic crisis – that susceptibility can become a problem.
So what are the warning signs?

  •  Unclear reasons for particular supplies or sketchy details on the type of service provided
  •  Corporate suppliers using offshore addresses
  •  Incorrect supplier VAT number
  •  Unfolded  invoices – not been in the mail
  •  Invoices being paid more than once
  •  Invoices from various suppliers, all on similar paper – or presented in the same way
  •  Supplier does not offer the usual terms or discounts


Obviously as a manager the default setting should be one of trust, but these are just a few of the warning signs to look out for which may mean further investigation is necessary.  The risk of fraud being possible increases in organisations which have weak controls.  This lack of control is particularly relevant where it includes weak account opening and closing procedures, poor control over dormant supplier accounts and where a number of people are able to access and make amendments to the accounting system.


Looking ahead to the next six months, I think the process is going to be one of consolidation.  If organisations can keep a lid on spending while shoring up their procedures against excess spending and fraudulent activity, it’s likely that those same organisations will still be thriving six months from now.