Accounts Payable News^®

What to Keep – What to Throw Away

In response to the increasing pressures on accounts departments to comply with an ever deeper burden of compliance legislation, it’s all too easy to panic and either blanket record everything, or feel overwhelmed, and miss crucial documentation.  The trick is to know what to keep, and what can safely be discarded.

In the US, the implementation of Sarbanes-Oxley has led some organisations to monitor everything from phone calls, emails and IM.  Although of course it is vital that these are monitored – recording all transactions regardless of their importance is both time consuming and futile and ultimately, like someone on a crash diet, doomed to failure.  Although we don’t yet have a similar act in the UK, accounting procedures are increasingly compliance led – with many feeling that the appearance of a similar act is only a matter of time.

Know Your Organisation

So, since achieving legal compliance is a primary goal for most organisations, the first important step in creating a policy is to know which regulations you’re trying to comply with.  Having an in-depth knowledge of your company will also mean knowing which retention policies will suit your business cycles.  It may seem obvious, but the simple defining of what constitutes an important document will need careful analysis.

As I mentioned, in many cases even emails and IM correspondences are being stored as it could be, for example, that changes to contracts or deals have been mentioned which are unlikely to be referred to again in a more traditional way.  Some companies will demand a signed for piece of documentation, but others will not.  Therefore it is important that you have clearly defined examples of what constitutes a document worth tracking and filing.  The important thing is not to assume; and to ensure that whatever policies are adopted, all employees can follow them with ease.

“Not More Work..”

An initial reaction to the shift towards a more stringent compliance culture is sometimes that A/P professionals feel that there will be an increase of time pressures and that it will prove expensive, both through re-channelling of staff and monetary outlay on new procedures.  However, this isn’t necessarily the case.  Although it’s true that new procedures don’t invent themselves, and a change in policy will affect the day-to-day running of your A/P department – given time it is highly likely that they will actually save time and money, especially with the onset of automation.

Automation

Let me explain.  Your organisation is legally required to present accurate and legally complying transactions, so as a necessity you decide to automate your procedures from invoice reconciliation and master vendor files, to duplicate payment finder technology and imaging and workflow.  This alleviates pressure on time strapped A/P professionals and can save a sometimes shocking amount of money from eliminating and highlighting duplicate payments.   In addition, it can capitalise on vendor discounts for prompt payments.  Also, in many cases, automating the accounting systems can prove useful for monitoring metrics for use in many other areas across your organisation.

Stay Safe from the Auditors

Unfortunately even the toughest compliance procedures can’t prevent a deliberate act of rogue business practice, but at least with the right attitude, automated I.T technology and staff who are clear on their responsibilities, you’ll have gone a long way to making it increasingly difficult.  In addition, a clean bill of health from the auditors keeps your organisation in business and you safe from the Classifieds!