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08.26.08 How to Catch AP-Related Swindles
Occupational fraud occurs when individuals use their occupations or job positions to rip off an organization. The average organization loses 7 percent of its annual revenues to this type of fraud, according to the 2008 Report to the Nation on Occupational Fraud & Abuse, from the Association of Certified Fraud Examiners (ACFE). Occupational fraud that affects AP includes phony invoices, check tampering, and expense report padding.
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08.14.08 >>> AP Benchmarking Survey Now Open <<<
How much does it cost AP departments to process an invoice? How many invoices should AP staffers be able to process in a month? What is the average error rate for payments? You will get the answers to these questions--and a lot more—if you take part in our AP Benchmarking Survey. We’ll send you the results so you can see how your AP department stacks up against all the others.
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08.08.08 Test Your AP IQ: Recovery Audits
AP departments use recovery audit firms to find and collect overpayments to vendors. How much does the audit recovery firm keep of the amounts they actually recover?
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07.15.08 Recovery Audits Snare Big Bucks
Private recovery auditors have retrieved almost $700 million in Medicare overpayments to hospitals and other medical providers, according to the Wall Street Journal. This amount was recovered over about a three-year period as part of a pilot program examining improper payments, most of which involved claims filed in New York, California, and Florida. Under the program, the recovery auditors are paid a percentage of the overpayments they retrieve.
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07.14.08 SEC OKs SOX Delay for Small Biz
The Securities and Exchange Commission has approved a one-year extension of the compliance date for smaller public companies to meet the Section 404(b) auditor attestation requirements of the Sarbanes-Oxley Act. In a news release, the SEC said that with this extension, "smaller companies will now be required to provide the attestation reports in their annual reports for fiscal years ending on or after Dec. 15, 2009."
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07.09.08 Fraud Control for Online Payments
More than four out of five organizations take the same handful of actions to safeguard online payments and cash management data, according to the 2008 Payments Fraud and Control Survey from the Association for Financial Professionals (AFP). The report points out that the concern today is heightened because of news headlines reporting hacker attacks, data breaches, and internal fraud.
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07.02.08 Fighting P-Card Fraud
Slightly more than one in ten (13 percent) of organizations that use purchasing cards (p-cards) report that they experienced attempted or actual payments fraud through the use of these cards, according to the 2008 Payments Fraud and Control Survey from the Association for Financial Professionals (AFP). This is a concern, especially if you are considering growing your p-card program.
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05.21.08 Get a SAS 70 Seal of Approval
Using a third party for AP automation is getting more common. For example, an outsourcer may do your invoice scanning as part of your imaging setup. When you do this, you are still on the hook for it from an internal control standpoint. This is particularly important under the internal control requirements of Section 404 of Sarbanes-Oxley. Your organization is still responsible for ensuring the control of a process regardless of whether it’s handled in-house or not.
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05.16.08 Test Your AP IQ: Three-Way Match
How familiar are you with AP rules, regulations, and best practices? Here’s a multiple-choice question to test your knowledge: What is the source of the most bottlenecks in the three-way match process?
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05.09.08 Test Your AP IQ: Invoice Exceptions
How familiar are you with AP rules, regulations, and best practices? Here’s a multiple-choice question to test your knowledge: The most efficient way to handle invoice exceptions is to have them resolved by what department or entity? more...
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05.06.08 Keeping a Log of Check Stock
Despite today’s super high-tech environment, most business-to-business payments are made by paper check. And that means keeping track of the blank check stock—using a log.
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04.29.08 IRS Blunder Points Up New AP Best Practice
One of the new frontiers for AP is in “contract compliance.” That is, avoiding incorrect payments for contracted goods or services. All kinds of fluky things can happen with contract payments, such as unsubstantiated charges, wrong billing rates, padded reimbursements, extra charges, double charges—well, you get the picture.
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04.28.08 How AP Pros Tweaked T&E Due to SOX
The review and approval process for employee reimbursements for travel and entertainment (T&E) expenses was the most cited area that needed changes because of the Sarbanes-Oxley Act (SOX), according to a recent survey we conducted.
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04.25.08 Test Your AP IQ: Payments Regulated by OFAC
Under the rules of OFAC (Office of Foreign Assets Control), organizations are prohibited from doing business with individuals or entities on the government’s list of Specially Designated Nationals and Blocked Persons (SDNs). In terms of making payments to SDNs, what is the “de minimis” threshold (small payment amount that is exempt from OFAC)? more...
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04.22.08 5 Key Basics of Invoice Handling
In our research for the new Complete Guide to AP Best Practices, we found that no two AP departments process invoices exactly alike. But we did find certain practices common to all—or that should be common to all—because of internal control purposes. Prior to the enactment of the Sarbanes-Oxley Act, lack of adequate controls over invoice handling only opened the organization up to fraud or duplicate payments. We said “only” here, but these are serious consequences to be sure. But now, organizations subject to SOX that do not have adequate invoice handling practices risk running afoul of the new legal requirements. The following five best practices form the basis for a solid invoice handling process. more...
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04.16.08 Fighting ACH Fraud
As AP departments move more payments from paper checks to electronic payments, the risk of ACH fraud increases. The 2008 Payments Fraud and Control Survey from the Association for Financial Professionals (AFP) says that failure to adopt effective internal procedures and bank fraud control services were the most frequently cited reasons for losses due to ACH fraud. more...
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04.08.08 Nix Punctuation in Vendor File
Periods, commas, slashes, hyphens, ampersands—all of those little marks may seem like nothing. But their significance in a master vendor file can be enormous. These marks are common triggers of duplicate vendor entries. To avoid duplication, it is important to make and enforce a policy for consistent use of punctuation.
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04.02.08 Fight Fraud With E-Payments
What is the overwhelmingly preferred target for criminals committing payments fraud? Paper checks. According to a new survey, almost all organizations (94 percent) that experienced attempted or actual payments fraud were victims of check fraud in 2007.
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03.31.08 SOX Delay for Small Biz Under Fire
The Securities and Exchange Commission's proposal to grant smaller public companies an additional year--until the end of 2009--to comply with the audit attest requirement of the internal controls reporting provision of the Sarbanes-Oxley Act--which would be the fifth such deferral--remains contentious.
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03.18.08 P-Card Blocks and Limits
As part of a program of internal controls for purchasing cards (p-cards), most organizations block transactions to certain Merchant Category Codes (MCCs). According to preliminary results of our latest survey on p-card usage, 63% of organizations polled use MCC blocking. A quarter of respondents block specific vendors. And almost all (95%) block ATMs to prevent access to cash. more...
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03.07.08 Test Your AP IQ: Occupational Fraud
How familiar are you with AP best practices, rules, and regulations? Here’s a question to test your knowledge: AP departments at small organizations find that they are especially vulnerable to “occupational,” or employee, fraud (misuse or misappropriation of assets by, for example, check tampering, phony payments, expense report padding) because of what?
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02.25.08 Easy Way to Research Taboo Payees
Your organization is prohibited from making payments to any individual or entity that is on the “OFAC” list. The Office of Foreign Assets Control (OFAC) is part of the U.S. Treasury Department and enforces economic sanctions against countries and groups of “unsavory” individuals, such as terrorists and drug traffickers.
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02.12.08 Watch That Plastic
Two employees used corporate debit cards as part of their overall scheme to steal $200,000 from a New York elementary school, investigators charge. The employees, who worked for the Department of Education, allegedly used four school-issued debit cards to buy $19,000 worth of “school supplies” that included cigarettes and beer, according to news reports. Investigators faulted the school’s principal and DOE supervisors for “poor oversight.”
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02.11.08 One-Year SOX Delay for Small Biz
The Securities and Exchange Commission has delivered on its past promise by proposing a one-year extension of the Sarbanes-Oxley Act (SOX) Section 404(b) auditor attestation requirement for smaller companies. The SEC also announced that its staff has begun a cost-benefit analysis of the requirement.
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01.29.08 Segregation of Duties Dilemma
The concept of segregation of duties is a very basic—but important—part of an internal controls program. It’s a key line of defense for organizations to combat vendor and employee fraud.
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01.25.08 Test Your AP IQ: Record Retention for AP
When in doubt about how long to keep AP-related records and documents, you’ll generally be safe if you choose what period of time?
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01.22.08 What’s Your AP-to-Inventory Ratio?
The mostly widely used ratio financial analysts use that’s AP-related is DPO (Days Payables Outstanding). But here’s one that’s not as well known but deserves some attention: the AP-to-inventory ratio. It reveals the percentage of inventory on-hand which hasn’t been paid for or, in effect, financed by the vendor. more...
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01.15.08 Avoid a “Swiss Cheese” Nightmare
Full of holes. That’s what will happen to your AP policies and procedures if you don’t maintain best practices—as the following situation seems to indicate. Treasury officials in Tennessee are investigating an accounts payable clerk for the city of Oakland, Tenn. for alleged fraud, according to WHBQ FOX13 myfoxmemphis.com. In an investigative audit, the Tennessee Comptroller of the Treasury states: “…the former accounts payable clerk issued 57 fraudulent checks, totaling $42,165, to legitimate town vendors. The former clerk did not deliver the checks to the vendors, but instead, apparently cashed the checks at a local bank and diverted the proceeds to her personal benefit.”
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12.21.07 Test Your AP IQ: Petty Cash Reconciliation
How familiar are you with AP rules, regulations, and best practices? Here’s a multiple-choice question to test your knowledge: A company establishes a petty cash fund in the amount of $500. The year-end reconciliation is now being done. The petty cash vouchers/receipts total $398 ($300 for office supplies and $98 for doughnuts). The cash in the fund is $100. In what amount should a check be drawn to replenish the fund?
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12.18.07 Best Tools for a Smooth Year-End Close
It’s down-to-the wire time for the year-end close—and the best tools to ensure a smooth finish are: planning and communication. Here are some ideas.
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