We need a strong payables process so that it provides us with a high-productivity accounting solution to process vendor payments. An integrated payables process provides strong financial control so you can prevent duplicate payments, pay for only the goods and services you order and receive, and maximize supplier discounts. Understand the key features of an effective accounts payable system.
Given below are the key requirements from any automated world class accounts payable system:
Flexibility:
Payables system should provide flexibility for managing and streamlining invoice and payment processing. The flexibility is required in the areas of account structure, multiple calendars, multiple currencies, multiple bank accounts, multiple payment terms and how the system helps entering the information by defaulting linked information from the master data.
Accurate Invoice Processing:
Payables system should provide controls and automations to improve the efficiency of invoice processing and simultaneously help ensuring the accuracy of payables information. Some automation features or best practices are automatically matching an invoice to a purchase order by providing the purchase order number. Defaulting the accounting details and other information based on the matched purchase order.
Invoice Approvals:
As controllership and sox requirement the payable system should support two-, three- and four-way matching of purchase orders, invoices, receipts, and requester acceptance documents. Further it should provide approval mechanisms to ensure segregation of duties.
Multiple Payment Types:
System should provide capability to handle every form of payment, including manual payments, wire transfers, bank drafts, electronic funds transfers, and automatic checks. Further these payments should automatically or manually reconcile with the bank statements.
Supplier Interface:
System should enable resolve business issues quickly by providing immediate and accurate responses to supplier inquiries. Ability to view Invoice and Payment status information together to take informed decisions and have a meaningful conversation with the supplier.
Additional Information:
Ability to record detailed information about suppliers, including their purchasing, payment, and invoice processing preferences, flexible address formatting for global operations.
Electronic Data Interchange (EDI):
This allows exchanging payables data with external parties like banks and suppliers. Ability to use EDI drastically reduces many manual steps.
Pay on Receipt:
This is a financials feature that automatically creates supplier invoices based on receipts and purchase orders information. An advanced feature will automatically create matched invoices, automatically approve invoices and then make EDI or other electronic payments to the supplier.
Open Interfaces:
Ability to bring procure to pay data from other systems to the payables system.
Accounts Payable Journal Entry
Although in the large organizations the Procure to Pay Accounting process starts when the purchase order for supply of goods is released to the supplier. To keep things simple in the beginning we will discuss the core accounting entries related to the Accounts Payables process.
Overview of Warehouse Processes
The basic function of a warehouse is to store goods. This means that they receive deliveries from suppliers, do any necessary checking and sorting, store the materials until it is dispatched to customers. Traditionally warehouses were seen as places for the long-term storage of goods. Now organizations want to optimize their customer experience and try to move materials quickly through the supply chain, so the role of warehousing has changed.
Miscellaneous Warehouse Processes
At the end of each inventory control, the Contractor provides the Ordering Person with an inventory report which contains a list of all stock adjustments. The Ordering Person uses the report to create, by use of his/her own means, necessary value and accounting adjustments related to the stock. Let us look at some to the mislaneous warehouse processes not covered earlier.
One of the warehousing best practices that retailers like Walmart, Amazon, and Target have adopted is known as cross-docking. During this process the inbound products are unloaded at a distribution center and then sorted by destination, and eventually reloaded onto outbound trucks. In real parlance, the goods are not at all warehoused but just moved across the dock (hence the name).
One of the most important decisions when running a warehouse is its layout. Warehouse layout defines the physical arrangement of storage racks, loading and unloading areas, equipment and other facility areas in the warehouse. A good layout aligned with the business needs could have a significant effect on the efficiency.
Transport operations are often divided into full load and part load and due to economies of scale, the unit costs are higher for part loads. Our customer needs several part loads delivering, so it can reduce costs by consolidating these into full loads. Then it gets all the part loads delivered to a warehouse near the suppliers, consolidates them into full loads, and pays the lower costs of full-load transport to its operations.
Warehouses can be places where piles of packed or loose products occupy space. If left disorganized, it will become very challenging to identify products for packing or picking. Hence, proper organization of warehouse is very important. Warehouse labeling systems eliminate this problem by making sure products are easily identified and managed during the warehousing and shipping process. Labeling is the most functional and cost-effective way to keep your warehouse organized and operating efficiently.
Understand the Accounts Payable process. Understand the AP cycle and the various tasks that need to be completed during AP transaction processing. Learn the key activities and setups that are done in any typical system during the AP processing.
Resource Planning is the process of planning for expected workload and determining the number of resources required to complete each activity in the warehouse. There are many types of warehouse positions, and they also vary by the employer, the scale of operations and location. Discussed here are generic positions applicable to warehouse management processes.
Inventory is money, and hence businesses need to perform physical inventory counts periodically to make sure that their inventory records are accurate. The traditional approach to conducting inventory counts is to shut down a facility during a slow time of year to count everything, one item at a time. This process is slow, expensive, and (unfortunately) not very accurate.
© 2023 TechnoFunc, All Rights Reserved