All facilities receive invoices for goods and services provided.  It is imperative to have a strong accounts payable system in place so that the monthly financials portray the true story.

Reviewing Invoices for Accounts Payable

Making sure all the expenses for the month are captured is key to avoiding, understating, or overstating expenses. Although many invoices are recurring and discrepancies will be caught during the financial review, this is not the case for all amounts.  A simple yet effective way to verify you have booked all the invoices is to reconcile the accounts payable report to statements received from vendors. Although this can seem time consuming, it is an easy way to pinpoint if the facility is missing certain invoices or credit memos. It also helps detect errors that may have been made when entering the invoice into the system. Keying errors can happen if amounts are being entered quickly, so this review can prevent incorrect payments which create additional work later and could cause potential cash flow issues.

In addition to making sure all the invoices have been submitted, it is very important to review the accounts payable batches when posting to make sure the expenses land in the correct fiscal period. Not only does this make the financial review go more smoothly, it may also affect purchasing decisions. This is crucial when the facility uses the monthly expense amounts to make decisions on how to run their departments. Expenses are often compared to budget, and if the person reviewing the income statement thinks they are under budget, he or she might be led to believe they are able to spend more when that is not the case. Being able to accurately see how the facility operated during the month can help avoid these situations.

With everything that goes on day to day, it can be hard to find time for these additional reviews. However, if amounts are entered correctly on the front end, it allows for a smoother process down the line.