A Guide to Accounts Payable Best Practices

1. - A PUBLICATION from OnPay Solutions- A GUIDE TO Accounts Payable Best Practices THE STEP-BY-STEP GUIDE TO A/P BEST PRACTICES AND HOW YOU CAN IMPLEMENT THEM FOR $UCCESS

2. TABLE OF CONTENTS 1 Introduction 4 Best Practice 1- Do You Have What You Need to Do Your Job Efficiently? 9 Best Practice 2- It’s OK to Delegate Duties…but Which Ones? 14 Best Practice 3- Is you’re A/P Department as Safe as It Can Be? 17 Conclusion

3. Introduction - A PUBLICATION from OnPay Solutions- Do you feel as though at times, your Accounts Payable department could run a little more efficiently? Do you feel as though time and money are sometimes wasted on getting the “little things done”….little things that prevent you from really focusing on the bigger, more important duties? Do you feel as though you’re A/P department isn’t as safe and secure as it could or should be? If you said YES to any of the above questions, then this eBook is for you!

4. CHAPTER ONE The Right Tools

5. The Right Tools ERP and Accounting Software Fall Short of Delivering what Accounts Payable Departments Really Need Modern ERP and Accounting Software packages often come with payment automation technology built in to their systems. This includes the ability to print business checks using a desktop laser printer and make electronic ACH payments with remittance detail delivered directly to a payee via email. We are often asked why a business should use a third-party payment platformif the company’s accounting system or ERP has the technology built-into it. The most important reason: Security and control of the process should be the single most important consideration that a company should have regarding the automation of payments. There are three ways that most accounting and ERP systems fail to deliver the security that an organization needs most.

6. First, we find that check printing directly from an Accounting or ERP system to a desktop laser printer can typically be performed by anyone who has access to the Account Payable module. Best practices for A/P dictate that there should be a separation of duties between entering checks and printing checks. Even when a system specifies this separation, most ERPs allow anyone with “check writing access” to print checks. Look for a payment system that separates duties at the log-in level… by the use of a password access to gain access to the printing feature, thereby ensuring that only the users who have printing rights can perform the check printing. Also keep in mind that in addition to separation of duties, one should seek a system that tracks each user’s activities by an application’s audit report.

7. Next, consider the printer. A standard desktop laser printer can be switched in to “Copy” mode or have a built-in “Reprint” button that can be enabled after a document is sent to it. This is a deal-breaking security concern. An unscrupulous individual may print a check to the printer, switch the printer in to copy mode and reprint an unlimited, unaudited number of reprinted negotiable documents. Always seek a check writing software that works exclusively with certified MICR printers that have the “Copy” and “Reprint” feature disabled. Or better yet, choose to outsource the print and mail.

8. Finally, many desktop printers also have a built-in memory. Again, the wrong person with access to a printer may be able to “extract information” from memory and create negotiable documents. For this reason we recommend that printers are secured through a special setting which will “wipe clean” all memory after a check run is printed. There are a variety of other reasons we encourage companies to consider handling payables outside of their ERP systems. Chapter 2 of this eBook will provide more insights.

9. CHAPTER TWO Solutions

10. Solutions We recently had a discussion with a very large company about Vendor Management that reminded us of just how daunting it can be to maintain the company vendor database. Simply managing the vendors can be overwhelming. With more data mining and BI software available, companies are now beginning to understand how they interact with their vendors. This information can then point them then in the right direction as they seek to expand their Electronic Accounts Payable Program (EAP) and leverage vendor relationships for maximum discounts. From the vantage point of having more information and knowing that it is best to pull such vendors into an EAP, how does a company collect the ACH instructions from the database of thousands of vendors?

11. Companies may wonder: •Who will call the vendors •Who will collect the ACH instructions • Who will key data into the Accounting or ERP system •How will we keep this vendor data secure... and the questions of security could go on. This may lead them to believe that migrating to E-Payments seems to be more work, not less and without the time, resources and the budget to address the migration that it's best to keep business as usual. To address this problem, Vendor Management Services exist to help collect data and many offer access to vast databases of corporate ACH instructions and Credit Card Acceptors.

12. Others provide one-to-one communications designed specifically for your vendor database. Others combine a communications program with a web portal allowing a vendor self-service model to collect ACH and Credit Card deposit instructions. Any of these programs may work for your company but most come with hefty up-front fees or reoccurring monthly fees.

13. When researching vendor enrollment services, keep the following goals in mind: 2) Seek a vendor management service provider who can streamline communication and launch your E-Payment program in 30 to 45 days. 3) Work with a company that will help your company analyze its vendor database then set a goal of converting up to 80% of your overall vendors, but 60% of your most frequently paid vendors, to ACH or Credit Card. 4) Do not require a significant change to current A/P processes to make the move to electronic payments. Seek a program that allows you to issue electronic payments even when/if your accounting system can only issue a check file. Vendor management and vendor data collection and analysis may discourage or dispirit —BUT it doesn’t have to. Follow the checklist above and you will find the right service for you.

14. CHAPTER THREE Protection & Security

15. Protection & Security If your goal is to not waste money and be secure, then an ERP is NOT the way to go...A Payment Automation Hub is the ticket. Last year alone, Panorama Consulting Solutions reports that ERP implementations cost most companies 5% of their overall operating budget. And, enhancement projects (many of which included electronic payment processes) failed to stay on track in 2014. This is also despite the fact that some ERP projects were on and even under budget. Regardless of the statistics, there are some that just haven't given up on this process that is less efficient.

16. This is also despite the fact that some ERP projects were on and even under budget. Regardless of the statistics, there are some that just haven't given up on this process that is less efficient. In addition to the continuing inefficiency of issuing payments via an ERP or accounting system, it is also less effective when it comes to security. Below are three ways a payment automation hub can protect you. 3 Things to look for in a Payment Automation Hub (So it will PROTECT YOU): 1. The Payment Hub forces a separation of duties by the use of password access to the printing feature. Only users that have print rights will be able to print. Every other user is not only blocked out, but monitored by an application’s audit report. 2. The application works exclusively with a SAEE16/SOC II certified print and mail center. 3. Avoid desktop computers that have built in memory, which makes it easy for A/P Departments to fall victim to individuals stealing their data. A Payment Hub is the Payment Automation Solution that accounts payable departments really need. Protect yourself by stepping away from payment modules in ERP's. Protect yourself with a solution based payment automation hub.

17. Now See How a Payment Automation Hub Can HELP YOU