Join | Member Login
Arlington (VA) Chamber of Commerce | Arlington, VA 22201
  • Membership
    • Membership Benefits
    • Join Now!
    • Chamber Assisted Grand Openings
    • Chamber Member Retirement Program
    • ShopChamber
    • Advertising >
      • Website Ads
      • E-Newsletter Ads
      • Print Ads
    • Committees
    • LeadShare
    • Annual Corporate Sponsors
    • Member Login
  • Business Directory
  • Events
    • Chamber Calendar
    • Community Calendar >
      • Submit a Community Event
    • Networking Events >
      • Chamber 101
      • Breakfast Connection
      • Business After Business
    • Signature Events >
      • Arlington Business Gala
      • Hospitality Awards
      • Legislative Breakfast
      • Arlington Chamber Volunteer Day
      • AWE Women in Business Summit
      • Best Business Awards
      • State of the County & Public Safety Awards
      • Annual Meeting
    • Educational Events
    • Women in Business
    • Travel
    • Online Learning Center
    • COVID-19 Event Policy
  • Community
    • Arlington Restaurant Week
    • Small Business Accelerator
    • Early Childhood Financial Resiliency Accelerator
    • Coronavirus Resources
    • Coupons
    • Job Board
    • Scholarship Fund
    • About Arlington >
      • Business Resources
      • Map of the Area
      • Visiting Arlington
  • Business Advocacy
    • Public Policy Positions
    • Arlington Advocacy >
      • Budget & Taxes
      • Planning
      • Project Support
      • Economic Development
      • Processes
      • Retail & Signage
      • Transportation
    • Virginia Advocacy >
      • Budget & Taxes
      • Transportation
      • Economic Development
      • Other Topics
    • Recent Advocacy
  • About the Chamber
    • Board of Directors
    • Staff Directory
    • Chamber in the News
    • Strategic Plan
    • FAQs
    • Blog
    • Publications >
      • Arlingtonian Archives
      • Arlingtonian Archives
    • Press Releases
    • Contact Us
  • Membership
    • Membership Benefits
    • Join Now!
    • Chamber Assisted Grand Openings
    • Chamber Member Retirement Program
    • ShopChamber
    • Advertising >
      • Website Ads
      • E-Newsletter Ads
      • Print Ads
    • Committees
    • LeadShare
    • Annual Corporate Sponsors
    • Member Login
  • Business Directory
  • Events
    • Chamber Calendar
    • Community Calendar >
      • Submit a Community Event
    • Networking Events >
      • Chamber 101
      • Breakfast Connection
      • Business After Business
    • Signature Events >
      • Arlington Business Gala
      • Hospitality Awards
      • Legislative Breakfast
      • Arlington Chamber Volunteer Day
      • AWE Women in Business Summit
      • Best Business Awards
      • State of the County & Public Safety Awards
      • Annual Meeting
    • Educational Events
    • Women in Business
    • Travel
    • Online Learning Center
    • COVID-19 Event Policy
  • Community
    • Arlington Restaurant Week
    • Small Business Accelerator
    • Early Childhood Financial Resiliency Accelerator
    • Coronavirus Resources
    • Coupons
    • Job Board
    • Scholarship Fund
    • About Arlington >
      • Business Resources
      • Map of the Area
      • Visiting Arlington
  • Business Advocacy
    • Public Policy Positions
    • Arlington Advocacy >
      • Budget & Taxes
      • Planning
      • Project Support
      • Economic Development
      • Processes
      • Retail & Signage
      • Transportation
    • Virginia Advocacy >
      • Budget & Taxes
      • Transportation
      • Economic Development
      • Other Topics
    • Recent Advocacy
  • About the Chamber
    • Board of Directors
    • Staff Directory
    • Chamber in the News
    • Strategic Plan
    • FAQs
    • Blog
    • Publications >
      • Arlingtonian Archives
      • Arlingtonian Archives
    • Press Releases
    • Contact Us

ChAmber Blog

Do You Pay Bills That You Shouldn't?

1/21/2015

0 Comments

 
by Christine M. Searle, CIA, CRMA, Owner, Searle Business Solutions, LLC. 
You are a busy business owner or non-profit leader. Your organization purchases or contracts for the goods and services that are necessary to operate and deliver services promised to the customer. You pay the invoices and credit card bills that arrive.
But are you sure the bills are accurate? Are you getting the goods and services for which you are being billed?
You work hard for your revenue or donations, so it is important that you consider these questions before paying any vendor invoice or credit card bill:
  • Were the invoiced goods or services received and accepted?
  • Is the invoiced price accurate?
  • For non-profits, were taxes included for goods or services for which you are exempt?
  • Were all bills and credit card charges for valid business purposes?
  • Has this invoice already been paid?
Invoicing and payment mistakes can be made by the vendor or by someone in your organization. You can reduce costly errors by implementing some best practices for managing accounts payable and funds disbursements. Attention to this part of your business or non-profit also sends a strong signal to your vendors, employees, and volunteers that payment activities are being monitored.
Best Practices for Paying the Bills
1. Separation of Duties
Separation of duties helps to ensure that only appropriate, authorized payments are processed by having more than one person control conflicting tasks in the payment process. Potential consequences of not segregating duties include inappropriate or fraudulent expenses being approved and paid.
  • Best practice is to have different people:
    • Approve purchases or purchase commitments
    • Receive ordered materials or validate that services were provided
    • Approve payments
    • Review and reconcile financial records
  • Expense payments and reimbursements for executives/leaders should be approved by a controller, Board member, or other independent party.
  • Preparing the check or electronic payment should be separate from check signing/transmission.
  • To avoid payment misdirection, prepared and signed checks should be mailed directly, not returned to the requestor for mailing.
If the organization does not have enough people to separate duties, a regular, periodic review should be performed by someone who is independent of the approval and payment process, such as a Board member. The reviewer should be someone familiar enough with the organization to identify inappropriate financial activity.
2. Essential Recordkeeping
Tracking electronic or paper vendor invoices helps to ensure that bills are paid accurately and in a timely manner. Consequences of poor invoice management include missed discounts, late fees, and accidentally paying the same invoice twice.
  • Best practice is to ensure that:
    • Vendor invoices are electronically or manually logged and date stamped when received.
    • Vendor discounts are considered when scheduling payments.
    • Vendor invoices and supporting (e.g., receiving) documents are matched and maintained.
    • Vendor invoices are cancelled when payment is made.
    • Unpaid vendor invoices are maintained separately from paid invoices.
    • An accounts payable aging report is maintained and reviewed to avoid late fees and order holds.
Accounts payable and funds disbursement recordkeeping can be automated, manual, or a combination of both, depending on the organization's circumstances and resources. Automated processes still require human oversight to make sure the system is working properly and to address any potential issues, such as lost discounts or misapplied payments.
3. Accountability and Approvals
Accountability ensures that you authorize, review, and approve invoices for payment based on signed agreements, contract terms, and purchase orders. Establishing who in the organization is authorized to approve the commitment or expenditure of funds is an important part of safeguarding resources.
  • Best practice is to implement:
    • Owner or manager approval of all vendors and extensions of credit.
    • Review and update approval authorizations periodically.
    • Invoice check against supporting documentation.
    • Owner or manager review of unpaid vendor invoices and statements monthly.
    • Reconcile ledgers for accuracy of recorded transactions.
Potential consequences of not establishing approval accountabilities include making unauthorized, unnecessary, or fraudulent payments/purchases; payments to fictitious vendors; and incorrectly coded expenses, impacting financial reporting. All of these conditions equate to higher costs for your business or non-profit organization.
Even businesses and non-profits with just a few employees or volunteers have options for implementing many of these best practices at no or low additional cost. Your accountant or Board members are good resources to help.

​
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    The mission of the Arlington Chamber of Commerce is to strengthen businesses and the economic environment for those who work, live and do business in Arlington.
    Picture
    Contribute to the blog!
    Educate the Chamber membership and Arlington business community by writing a post for our blog! To get started download the blog guidelines and blog template. For questions and more information, contact the Communications Manager.

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013

    RSS Feed

© Copyright 2023 Arlington Chamber of Commerce. All rights reserved.
2009 14th Street, North  | Suite 100 | Arlington, VA 22201 | Directions
Tel (703) 525-2400 | chamber@arlingtonchamber.org
MemberClicks
Subscribe to This Week At Your Chamber
For Email Marketing you can trust.
Home | ​Join Now | Site Map