The next several blog submissions will deal with what I call the "Pain Points" in Accounts Payable. The first deals with a "Pain Point" that is near the top of very AP professionals list, namely "Rush Checks". They are sometimes referred to as On-Demand or ASAP Requests.
There are three basic reasons "Rush Checks" should be avoided:
- They increase the risk of duplicate checks.
- They increase the AP workload and processing costs.
- They open the door for potential fraud.
A "Rush Check" policy should clearly state, that only those requests that cannot be handled in any other way and are truly emergency in nature should be honored.
If your organization processes checks daily there should be no reason for responding to a "Rush Check" request.
Some procedural issues you should consider when reducing the volume of requests are:
- "Just say no", when you know you have senior management support.
- Require a higher level approval for such requests.
- Publish a report that reflects the top offenders for management review.
- Consider charging. This is one of the best ways of getting attention. In one Fortune 100 company, a rumor began circulating that AP was going to begin charging $100 per request. Though there was no plan to actually do so, reportedly the rumor was effective in reducing the number of "Rush Checks".
Some controls that should be put in place are:
- Requiring a system search to make sure this request was not already processed.
- Keeping a log of all "Rush Checks" issued.
- Requiring that all requests be documented as to reason necessary.
- Communication of relevant AP schedules, policies and procedures.
Many requestors blame AP that invoices are not being processed in a timely manner thus the need for "Rush Checks". Today with workflow AP knows exactly where an invoice is in the process, and many can be traced back to problems and bottlenecks in the invoice approval process.
Tom Nichols, president of Process Management Improvement, Inc., provides research, AP process improvement consulting, training and seminars to large companies and financial associations. Email Tom Nichols
