Accounts Payable Procedures : Controls
If the business owner is the only person in the business then these
controls aren’t necessary.
However, the minute an employee is taken on
who has the power to order goods or pay the bills or do the bookkeeping,
accounts payable controls need be put into place to ensure that the
owner and the employee are protected.
Here are a few ideas:-
should use an order book to purchase anything. Be sure to ask the
supplier to quote the order number on their invoice. There could be a
rule in place that only the business owner has the authority to sign the
order form before it goes to the supplier.
- A triplicate
order book works well. The original goes to the supplier, the first copy
goes behind the invoice when it arrives and the second copy stays in
- When the invoice arrives, the bookkeeper will
match the invoice to the order, checking the quoted order number on the
invoice. If the invoice is a little different to the order, it needs to
be queried with the person who placed the order.
- When it
comes time to pay the bill, the business owner should be the only one
with the power to sign cheques or authorize internet payments after checking and being happy with the orders, invoices and statements.