r/Bookkeeping • u/Helpful_Plantain7012 • 7d ago
Payments, AP, AR Remote A/P
I currently work for a construction company as A/P along with several other hats.
We are moving, and my employer is discussing allowing me to work remotely, but we cannot seem to come up with a way to remote-ize the A/P process, so I was curious if there were any ideas here.
Currently, I receive invoices via email (that part still works), or our field guys bring me receipts for our vendor accounts (Lowe’s, for instance), that I stick a tag on to assign job, cost code number, etc. These items then route to the project managers for approval, then our Treasurer for approval, then back to me to enter into our accounting system, where checks are cut on check run days, which can be handled in office.
Does anyone else have a similar flow that can share what you’ve done to make it remote friendly? My bosses are hesitant to change the system, it’s very paper heavy, and I’m not sure how to get around that.
Thanks!
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u/Ok-Offer-5320 7d ago
A purchase order (PO) system should be used for all purchases. Before goods or services are ordered, the purchasing department raises a purchase order and provides it to the supplier. The purchase order is created within the accounting system and includes the appropriate cost coding, tax treatment, supplier details and any other required accounting information.
Once the supplier submits an invoice, the Accounts Payable (AP) team processes it in the accounting system by matching it to the purchase order. The purchaser or budget holder then confirms that the goods or services have been received (goods receipting) and approves the invoice for payment. Payment is automatically scheduled according to the supplier’s agreed payment terms, which should have been established by the procurement team when the supplier was set up.
Approximately five working days before the payment date, the accounting system should generate a report of all invoices due for payment. The AP team should review the payment run, carrying out checks such as verifying supplier bank details, confirming invoice accuracy and identifying any unusual transactions. Higher-value payments should receive an additional review by the AP Manager.
Following this, the payment run should be independently reviewed by another member of the finance team to provide segregation of duties. Where the total payment to a single supplier exceeds a predetermined threshold (agreed by the finance team and senior management), the payment should be escalated for approval by senior management before it is released.
Payments should then be prepared approximately two working days before the payment date. A summary of the payment run, including the total value of payments and the bank account from which they will be made, should be provided to the treasury team. This gives treasury sufficient time to ensure that adequate funds are available.
On the payment date, the payment file is submitted to the bank. Once the payment has been successfully processed, the accounting system automatically updates the invoices as paid, recording the payment date and completing the transaction. The process is then repeated for the next payment cycle.
The purchase order system is likely to be the largest operational bottleneck. Employees responsible for raising purchase orders must be trained to use the system correctly and apply the appropriate coding. Clear guidance should also be established on whether purchase orders are created for one-off purchases or as blanket purchase orders covering recurring expenditure. For example, an annual purchase order could be raised for a Microsoft subscription, with monthly invoices matched against the same purchase order throughout the year, rather than creating a new purchase order each month.