Originally published in
April 1997 - Volume 6, Number 3
Reprinted with permission

ACCOUNTS PAYABLE

It’s typical for one out of every 500 already paid invoices to contain an error, such as an over- or duplicate payment, says Jon Casher, Chairman of RECAP, Inc. (Oak Ridge, New Jersey).

His firm specializes in identifying and recovering overpayments, as well as accounts payable and purchasing consulting.

Fortunately, Casher reports that the likelihood of accounts payable errors can often be reduced by making some easy-to-implement procedural changes.

Here are two examples provided by Casher:

1). Communicate with your vendors. "Vendors can’t read your mind. If you don’t give them enough information to post properly, they can’t," Casher relates. This can result in disputes over bills.

For example, one of Casher’s clients had a payment problem with its overnight delivery vendor. The company subtracted amounts for overcharges and packages not delivered on time, but didn’t inform the vendor, he explains. "The information was never given to the vendor so that it could reconcile its accounts accordingly."

2). Make sure payments are made in the correct currency. With more international business being conducted, this can be a concern, Casher explains.

He provides the example of a company that paid a bill in U.S. dollars instead of in Belgian francs, which was the currency on the invoice. The result: overpayment by almost 30-fold.

"In most cases – except British pounds – you’ll end up overpaying if you pay in U.S. dollars instead of the currency on the invoice," he says.

Source: Jon Casher, Chairman, RECAP, Inc., 3040 Holiday Springs Blvd Ste 105, Margate, FL 33063-5425; phone (888)697-6430; fax (888)697-1530.

"Accounts Payable"
Copyright ©1997 by Siefer Consultants, Inc. Reprinted with the written permission of Siefer Consultants, Inc. 525 Cayuga Street, Storm Lake, IA 50588 712-732-7430. The Cost Controller is published monthly. Subscriptions are $249 per year.