Process Accounts Payable RCM

PROCESS ACOUNTS PAYABLE RISK AND CONTROL MATRIX (RCM)
PROCESS 5.2.1: PROCESS ACOUNTS PAYABLE RISK AND CONTROL MATRIX (RCM)
NO. PROCESS RISK CONTROL DESCRIPTION
Cash may be disbursed and short pays may be resolved for goods and services never received (or in An accounts payable staff member compares the invoice to the open purchase order and receipt of
1 Generate Invoice Payments
advance of receipt). goods or services.
Invoice approval is received at the department level. The central supply warehouse manager validates
Cash may be disbursed and short pays may be resolved for goods and services never received (or in
2 Generate Invoice Payments all receipts entered into the system/software at the central supply warehouse.
advance of receipt).
The duplicate payments option prevents the generation or editing of a duplicate payment number by
3 Generate Invoice Payments displaying an error when a preexisting invoice number is entered for the same vendor during voucher
creation.
4 Generate Invoice Payments Misappropriations or fraudulent payments may be made. The accounts payable supervisor reviews the Proposal for Payment Report weekly for unusual items.
5 Generate Invoice Payments Misappropriations or fraudulent payments may be made. Access to Auto Signature is restricted.
The open voucher summary report within the system/software identifies open voucher amounts, due
dates and required pay amounts by vendor/to vendors. The system/software also provides a voucher
aging report that gives management the ability to monitor the aging of entered vouchers. Payment due
6 Generate Invoice Payments Payments may not be made timely, resulting in lost discounts and late charges. dates are calculated based on the invoice date and the terms of the invoice. Upon performing the check
run process, payments are made for all vouchers due. Accounts payable management personnel
monitor the system/software’s accounts payable reports on a regular basis.
Printed checks are submitted with the invoice/purchase order to the controller and another officer for
7 Generate Invoice Payments Checks are paid in the wrong amount or to the wrong vendor.
comparison and approval. They cannot be mailed without the signature of the concerned officers.
The bank is provided with a listing of all issued checks and amounts to compare to all checks received at
8 Generate Invoice Payments Misappropriations or fraudulent payments may be made.
the bank. The bank only pays the checks on the listing and matches the amounts.
The company utilizes a vendor certification program and inspects incoming receipts in accordance with
9 Generate Invoice Payments Payment may be made to the wrong person or a fraudulent/non-existent company.
its plan.
The company communicates its policy to vendors informing them that it only pays for goods received.
Discrepancies between quantity shipped vs. billed are short paid.
All checks go through a quality review after being cut and before being distributed to ensure that the
amount is correct and supplier information is accurate and complete.
Only the accounts payable coordinator/the accounts payable concerned personnel can process
manual/reprinted checks.
13 Generate Invoice Payments Misappropriations or fraudulent payments may be made. The manager of accounting operations reviews all checks over a certain amount.
Debit balances in the accounts payable subsidiary ledger are promptly investigated and, if necessary,
refunds are obtained from vendors.
15 Generate Invoice Payments Misappropriations or fraudulent payments may be made. Disbursements are drawn on a zero balance account.
16 Generate Invoice Payments Misappropriations or fraudulent payments may be made. Voided checks are stamped "VOID" to prevent reuse and filed for subsequent inspection.
A pay system is used to electronically inform the bank of all checks issued in order to prevent payment
17 Generate Invoice Payments Misappropriations or fraudulent payments may be made. on forged checks or stolen check stock. Access to the positive pay system is limited to the appropriate
individuals who have been authorized by management.
Cash may be disbursed and short pays may be resolved for goods and services never received (or in The company has established tolerances for commodity purchases as appropriate. Receipts in excess of
advance of receipt). the tolerances may be returned to the vendor.
Critical forms (e.g., check requests, adjustment forms and checks) are prenumbered and controlled. The
19 Generate Invoice Payments system generates the next check number, which must match the check number in the routing code at
the bottom of the check.
20 Generate Invoice Payments Misappropriations or fraudulent payments may be made. Only managers can review, approve and code professional services and capital invoices for payment.
Purchase cost files are maintained and current. The company has a policy to only pay the purchase
order price regardless of the price on the invoice.
For all purchased goods, the invoice(s) received are routed to the initiator of the purchase for review and
Goods are received for unauthorized or invalid purchase orders and are not appropriately recorded in
22 Generate Invoice Payments approval for payment processing. The initiator of the purchase monitors the contract for compliance,
the system.
performance and costs.
If there are any errors on the check, the check is voided and a new check is printed after the accounting
23 Generate Invoice Payments Unauthorized checks are issued.
manager’s, controller's, or assistant controller's review and approval.
24 Generate Invoice Payments There are misappropriations or fraudulent payments. The company has controls to account for all checks.
User access is designed and configured to support the segregation of duties between procurement,
25 Generate Invoice Payments There are misappropriations or fraudulent payments.
receiving, invoice processing, payment processing and the vendor master.
A currency threshold is established for checks requiring two signatures (either two manual signatures or
one manual signature and one computer-generated signature).
The proper coding of invoices and automatic accounting instructions (AAIs) have been set up to
automatically recognize the appropriate accounts that are required for a specific batch transaction.
Checks are automatically prepared by computer based on the scheduled payment date entered when
the voucher is processed.
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Invoices for goods/services are paid in advance of the due date without regard to the time value of
29 Generate Invoice Payments Checks are released for payment based on the due date within the software/system.
money.
Invoices for goods/services are paid in advance of the due date without regard to the time value of
30 Generate Invoice Payments Payments within accounts payable designated as blocked are not able to be processed.
money.
All blank checks are kept in a locked drawer where only the accounting manager, assistant controller
and controller have access.
32 Generate Invoice Payments There are misappropriations or fraudulent payments. Vouchers of physical invoices are matched with the check register.
33 Generate Invoice Payments Payment discounts are not maximized. The treasury/cash manager coordinates with accounts payable as necessary for discounts.
34 Generate Invoice Payments Payment discounts are not maximized. Special discounts can be specified on an individual invoice basis.
The software/system automatically takes discounts as defined in the supplier master file for each
35 Generate Invoice Payments Payment discounts are not maximized.
individual invoice processed.
Appropriate matching between invoices, receiving documents and purchase orders may not be A limited number of suppliers are authorized for automatic release of payment. Tolerance levels are
performed. established for these vendors.
37 Generate Invoice Payments There are misappropriations or fraudulent payments. All supplier payments (except petty cash disbursements) are processed through the software/system.
Source documentation (checks, vouchers, etc.) is perforated, voided or otherwise cancelled to prevent
reuse.
The disbursement process is automated to generate checks based on invoice payment due date and
post the appropriate accounting entries.
The concerned personnel prepare weekly, monthly and quarterly trend analyses on the volume and
40 Initiate Purchase Orders (POs) Purchase orders, receivers and invoices are improperly processed, leading to variances.
percentage of variances to monitor processing integrity for continuous improvement.
41 Initiate Purchase Orders (POs) Purchase orders, receivers and invoices are improperly processed, leading to variances. Purchasing agents review an open purchase order listing on a regular basis.
Purchase orders are reviewed for accuracy and approved by an officer before they are submitted by the
42 Initiate Purchase Orders (POs) An incorrect purchase order is sent to a vendor.
purchasing manager (PM).
Exception reporting and investigation of processed invoices that vary from purchase orders or other
43 Initiate Purchase Orders (POs) Discrepancies exist between amounts on supplier invoice and supporting documents.
criteria by more than pre-established limits exist.
44 Initiate Purchase Orders (POs) An incorrect purchase order is sent to a vendor. The system/software requires that all fields are completed to initiate a purchase order.
45 Initiate Purchase Orders (POs) An incorrect purchase order is sent to a vendor. Generation of purchase orders is restricted to appropriate personnel.
Changes to purchase orders are reviewed and approved by management prior to mailing to the
supplier/vendor.
The staff member who initiates the initial purchase order is responsible for comparing rates and other
important information to vendor contracts.
48 Initiate Purchase Orders (POs) Duplicate invoices are received and processed, leading to duplicate payments. The system closes a purchase order once goods and services are received.
Goods are received for unauthorized or invalid purchase orders and are not appropriately recorded in
49 Initiate Purchase Orders (POs) Access to create a return order is restricted to authorized personnel.
the system.
Employees do not complete a purchase request or an expense reimbursement is not approved by the
50 Initiate Purchase Orders (POs) Employee expense reimbursements are approved by the employee’s manager.
department manager.
Employees do not complete a purchase request or an expense reimbursement is not approved by the The approver reviews the PO Request Form against the department’s approved budget for the year to
51 Initiate Purchase Orders (POs)
department manager. be sure that the purchase is within the current year's spending budget.
Employees do not complete a purchase request or an expense reimbursement is not approved by the Purchase requests are approved with a signature in accordance with the PO Approval Matrix. The
52 Initiate Purchase Orders (POs)
department manager. initiator is responsible for obtaining the appropriate approval for the purchase request.
The accounting manager reviews the PO Request Form, checks the account coding and signs off on the
PO Request Form.
54 Initiate Purchase Orders (POs) Misappropriations or fraudulent payments may be made. Non-budgeted items exceeding a certain limit set by the company are approved by the CFO.
Purchase order price differs from invoice price, resulting in price discrepancies that are resolved in favor
55 Initiate Purchase Orders (POs) HOLDs (Account, Funds, Invoice, Matching, Variance) are utilized for non-matching invoices.
of the supplier.
Monitor/Check the Invoices and Report The corporate controller reviews the Proposal for Payment Report and supporting documentations,
56 Misappropriations or fraudulent payments may be made.
Discrepancies including invoice and approval.
Monitor/Check the Invoices and Report
57 Misappropriations or fraudulent payments may be made. Accounts payable personnel review all checks with supporting documentations.
Discrepancies
Monitor/Check the Invoices and Report Accounts payable personnel review all aging reports monthly for credit balances or long outstanding
Discrepancies items and resolve any issues.
59 Duties are not adequately segregated. Limited personnel have the authority to change vendor master information, supplier terms, variances etc.
Discrepancies
Monitor/Check the Invoices and Report Roles are segregated in the system/software where individuals responsible for modifying supplier
60 Duties are not adequately segregated.
Discrepancies information can not process payments and invoices.
Monitor/Check the Invoices and Report The system/software automatically assigns a unique vendor number based on the configuration of next
61 There are discrepancies in vendor/supplier management.
Discrepancies numbers. It does not allow a duplicate number to be assigned.
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A designated accounts payable clerk reviews vendor transmittal requests and supporting documentation
(e.g., business cards, invoices, etc.) to determine the validity of the vendor. A designated clerk is
Monitor/Check the Invoices and Report authorized to create the vendor master record following the review for validity. Following the creation of
Discrepancies the vendor record, a vendor change report is generated and compared to the original transmittal by
another lead accounts payable clerk to ensure data accuracy. The vendor change report and original
transmittal are maintained for periodic review by a supervisor.
A vendor transmittal request is submitted by an authorized party to change the status of the vendor to
63 There are discrepancies in vendor/supplier management. HOLD. The authorized accounts payable clerk facilitates the change in the system and notes the reason
Discrepancies
for the hold. The general accounting manager monitors and approves vendor hold transactions.
Monitor/Check the Invoices and Report The system/software requires a payment to be issued against a valid vendor/supplier within the system.
Discrepancies
Monitor/Check the Invoices and Report The company utilizes a vendor performance program which monitors product quantity, delivery
Discrepancies performance, order quality and order fill rates.
Monitor/Check the Invoices and Report Accounts payable access to vendor master files is restricted to select data fields (address, phone, terms,
Discrepancies etc.).
The appropriate authorizations are documented and maintained online for review by the accounts
67 Invoices are not properly authorized, complete, accurate and timely. payable clerks. In addition, copies of authorizing signatures are maintained and available to the clerks in
Discrepancies
the event a signature is in question.
Monitor/Check the Invoices and Report Upon completion of invoice entry, a clerk compares the input batch detail to the actual invoices to
68 Invoices are not properly authorized, complete, accurate and timely.
Discrepancies identify key errors.
For voucher processing, the voucher amount is entered on both the voucher and general ledger screens.
If one of these amounts is entered incorrectly, an error occurs. A contingency audit is performed on a
69 Invoices are not properly authorized, complete, accurate and timely. regular basis to identify over/under payments. The system/software performs a check for duplicate
Discrepancies
invoice numbers.
The system/software provides for matching of purchase orders, receipts and invoices for central supply.
Payment can not be processed on unmatched documents.
Monitor/Check the Invoices and Report Appropriate matching between invoices, receiving documents and purchase orders may not be Units of measure conversion tables are used to ensure proper matching of purchase orders and
70
Discrepancies performed. invoices, as many vendors use a different unit of measure for the same product. Additionally, the
purchasing department reviews purchase orders to ensure that the appropriate unit of measure is used.

71 Policies and procedures do not exist to support the accounts payable function. A formal policies and procedures document exists to guide the accounts payable process.
Discrepancies
72 Policies and procedures do not exist to support the accounts payable function. Policies and procedures are established to define approval limits and authorization requirements.
Discrepancies
Monitor/Check the Invoices and Report The company has a cash management policy which is clearly communicated to the accounts payable
73 Policies and procedures do not exist to support the accounts payable function.
Discrepancies function. Such a policy is reflected in the accounts payable system configuration.
Monitor/Check the Invoices and Report Formal procedures exist that ensure that expenditures are approved before committing funds in
Discrepancies accordance with management directives.
Monitor/Check the Invoices and Report All contractual agreements are subject to corporate and/or legal review in accordance with local or
Discrepancies corporate directives or guidance.
Procedures provide for review of purchase orders to ensure completeness of critical information
76 Policies and procedures do not exist to support the accounts payable function. necessary to execute purchases and subsequent receipt and payment (e.g., vendor, prices, quantities,
Discrepancies
terms of payment, part numbers, descriptions, etc.).
Monitor/Check the Invoices and Report Procedures provide for processing of original vendor invoices only. Payments are not processed from
Discrepancies faxed copies of invoices or vendor statements.
A range of disbursement numbers is entered into the system before the checks are printed. After printing
78 Duties are not adequately segregated. the checks, the purchasing manager checks the last disbursement number of the input range with the
Discrepancies
last check printed.
A purchase authorization list is maintained that specifies the type of expenditures and limits in which
79 Duties are not adequately segregated. individuals have authority to commit the company. These authorization criteria may be maintained
Discrepancies
manually and/or within system applications.
80 There is inadequate safeguarding of accounts payable documents. All accounts payable-related documents are kept in a secure facility in the purchase manager's office.
Discrepancies
81 Misappropriations or fraudulent payments may be made. Requests for manual/quick checks are signed/approved by supervisors.
Discrepancies
Vendor names, prices and quantities from invoices are matched to receiving documents and purchase
82 Misappropriations or fraudulent payments may be made. orders by an individual independent of the purchasing and receiving functions. Discrepancies are
Discrepancies
resolved prior to processing.
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Monitor/Check the Invoices and Report A system link is set up for contra accounts to track payables and receivables associated with the same
83 Suppliers are paid an inaccurate amount due to improper tracking of account balances.
Discrepancies supplier.
Debit memos are logged in the software/system and associated with the appropriate supplier, allowing
84 Suppliers are paid an inaccurate amount due to improper tracking of account balances. the software/system to show only the net amount due to that supplier.
Discrepancies

85 There are discrepancies in vendor/supplier management. Federal tax ID numbers are required for all suppliers.
Discrepancies
Monitor/Check the Invoices and Report Duplicate federal tax ID numbers/vendors or supplier ID numbers are investigated by the accounts
Discrepancies payable clerk.
When a new supplier is entered, the system/software performs a check against the existing supplier
87 There are discrepancies in vendor/supplier management. master to confirm that the new request does not match a supplier already in the system. It will present an
Discrepancies
on-screen alert message if a duplicate is found.
All invoices received are maintained by the accounts payable group indefinitely (a certain number of
88 There is inadequate safeguarding of accounts payable documents. years onsite followed by maintenance in an offsite facility).
Discrepancies
All vendor/supplier request forms are maintained after they have been entered into the system/software.
89 There is inadequate safeguarding of accounts payable documents. Electronic versions are maintained in the online facility and printed versions are maintained onsite by the
Discrepancies
corporate accounts payable group.
Monitor/Check the Invoices and Report Subsidiaries review and approve invoices before sending to accounts payable for payment, thus
Discrepancies acknowledging receipt of goods or services.
Only original invoices are accepted by the accounts payable group for processing of payment.
91 Invoices are not properly authorized, complete, accurate and timely. Faxed/emailed copies are not processed, unless specifically approved by the accounts payable
Discrepancies
supervisor.
Monitor/Check the Invoices and Report Once an invoice has been approved and cleared in the system/software, access to make changes to the
Discrepancies related invoice (without the need for a new check) is only granted by IT.
Receipt of a good or service is logged on the associated purchase order in the software/system, which is
93 There is inadequate safeguarding of accounts payable documents. referenced at the time of payment approval.
Discrepancies

94 Misappropriations or fraudulent payments may be made. Finance management reviews all check registers for appropriateness.
Discrepancies
Monitor/Check the Invoices and Report Department managers are responsible for the review and accuracy of all purchase requisitions that are
Discrepancies released from their areas. They are responsible for ensuring that requisitions are accurate and complete.
Monitor/Check the Invoices and Report Unauthorized, fictitious or improper commitments or expenses may be incurred without management's Purchase commitments are made on the basis of authorized requisitions from user departments,
96
Discrepancies knowledge or approval. established contracts, established inventory reorder points or work order material requirements.
Monitor/Check the Invoices and Report Unauthorized, fictitious or improper commitments or expenses may be incurred without management's The system automatically sorts invoices by their payment due date to ensure proper issuance by the
97
Discrepancies knowledge or approval. accounts payable department.
Monitor/Check the Invoices and Report Unauthorized, fictitious or improper commitments or expenses may be incurred without management's Actual expenditures are compared to budget regularly; management reviews and approves significant
98
Discrepancies knowledge or approval. variances.
99 There is inadequate safeguarding of accounts payable documents. Management performs a review of accruals at month end and a checklist is signed off by the reviewer.
Discrepancies
Monitor/Check the Invoices and Report Corporate accountants email all applicable departments requesting support for all accruals or credits to
100 There is inadequate safeguarding of accounts payable documents.
Discrepancies be booked for the current month.
Monitor/Check the Invoices and Report Accounts payable clerks regularly send out notifications to all accountants informing them of any
101 There is inadequate safeguarding of accounts payable documents.
Discrepancies invoices over $X that have not been processed in accounts payable.
Monitor/Check the Invoices and Report Goods are received for unauthorized or invalid purchase orders and are not appropriately recorded in Once goods arrive, appropriate personnel complete a receiving report and scan the items into the stock
102
Discrepancies the system. system timely and accurately.
Monitor/Check the Invoices and Report Invoices without a purchase order that are not approved via an automated workflow must be approved
Discrepancies by appropriate management prior to payment.
104 Invoices are not properly authorized, complete, accurate and timely. Invoices are paid after three-way match or approval of invoice.
Discrepancies
Monitor/Check the Invoices and Report The company has established tolerances for commodity purchases as appropriate. Receipts in excess of
105 Quantities received differ from quantities billed on the invoice.
Discrepancies the tolerances may be returned to the vendor.
106 Payment may be made to the wrong person or a fraudulent/non-existent company. system generates the next check number, which must match the check number in the routing code at
Discrepancies
107 Payment may be made to the wrong person or a fraudulent/non-existent company. Managers must review, approve and code professional services and capital invoices for payment.
Discrepancies
Monitor/Check the Invoices and Report Payable and related accounts may be misstated because of incorrect adjustments or incorrect
108 Documented cut-off and period-end closing procedures are adhered to.
Discrepancies reclassifications of distributed amounts.
109 Misappropriations or fraudulent payments may be made. Non-budgeted items exceeding a certain limit set by the company are approved by the CFO.
Discrepancies
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Monitor/Check the Invoices and Report For capital expenditures, the PO Request Form is reviewed, approved and signed by the department
Discrepancies director and the department VP.
111 There are discrepancies in vendor/supplier management. The vendor listing is maintained in a vendor master file to ensure all vendors are valid vendors.
Discrepancies
If the vendor is not included in the company’s vendor master file, then the accounts payable specialist
112 There are discrepancies in vendor/supplier management. fills out a New Vendor Form and sends the New Vendor Form together with the invoice package to the
Discrepancies
accounting manager for review and approval.
Monitor/Check the Invoices and Report The vendor master file is reviewed on an annual basis by the accounting manager to ensure only valid
Discrepancies vendors are in active status.
Monitor/Check the Invoices and Report Goods are received for unauthorized or invalid purchase orders and are not appropriately recorded in The accounts payable specialist matches the invoice to the purchase order and transcribes the account
114
Discrepancies the system. code, department code and product number onto the invoice.
Monitor/Check the Invoices and Report All blank checks are kept in a locked drawer where only the accounting manager, assistant controller
115 Unauthorized checks are issued.
Discrepancies and controller have access.
Monitor/Check the Invoices and Report Payable and related accounts may be misstated because of incorrect adjustments or incorrect User access is designed and configured to support the segregation of duties between procurement,
116
Discrepancies reclassifications of distributed amounts. receiving, invoice processing, payment processing and the vendor master.
Monitor/Check the Invoices and Report All supplier information in the vendor master file is appropriately captured as per the laws/regulations,
Discrepancies circulars, etc. of a specific region (example: 1099 series reporting).
Monitor/Check the Invoices and Report Checks are automatically prepared by computer based on the scheduled payment date entered when
118 Discrepancies exist between amounts on supplier invoice and supporting documents.
Discrepancies the voucher is processed.
119 Discrepancies exist between amounts on supplier invoice and supporting documents. HOLDs (Account, Funds, Invoice, Matching, Variance) are utilized for non-matching invoices.
Discrepancies
120 There are discrepancies in vendor/supplier management. Suppliers are established within the software's system upon finalization of procurement procedures.
Discrepancies
Monitor/Check the Invoices and Report Invoices for goods/services are paid in advance of the due date without regard to the time value of
121 Payments within accounts payable designated as blocked are not able to be processed.
Discrepancies money.
122 Quantities received differ from quantities billed on the invoice. Payment stubs detailing invoice payments, discounts taken and short pay are provided with the checks.
Discrepancies
123 Detail activity may be incorrectly posted in the subsidiary ledger. The general ledger accounts are posted through the system/software cross-validation rules.
Discrepancies
124 Payment may be made to the wrong person or a fraudulent/non-existent company. Cost center managers are responsible for review of monthly costs.
Discrepancies
Monitor/Check the Invoices and Report The software/system systematically generates the journal entry upon completion of the payables check
125 Payment may be made to the wrong person or a fraudulent/non-existent company.
Discrepancies run.
126 A user may edit, modify or delete a matched invoice. The software/system logs user entry activity, including time stamp and entry activity.
Discrepancies
Monitor/Check the Invoices and Report Rights are restricted within the accounts payable user structure to limit powerful commands (batch
127 A user may edit, modify or delete a matched invoice.
Discrepancies approvals, add/del/mod/invoice, etc.).
Monitor/Check the Invoices and Report Workflow notifications are used to report any modifications to existing suppliers' key fields, remittance
128 A user may edit, modify or delete a matched invoice.
Discrepancies info, etc.
129 Special terms are not taken into account. The treasury/cash management manager coordinates with accounts payable as necessary for discounts.
Discrepancies
130 Special terms are not taken into account. Special discounts can be specified on an individual invoice basis.
Discrepancies
Monitor/Check the Invoices and Report The software/system automatically takes discounts as defined in the supplier master file for each
131 Special terms are not taken into account.
Discrepancies individual invoice processed.
132 There are discrepancies in vendor/supplier management. Standardized supplier setup forms with all required data fields are used.
Discrepancies
133 An adequate audit trail may not be available. All invoice batches are entered with a standard naming convention.
Discrepancies
134 Unauthorized checks are issued. Electronic signatures/authorization stamps are appropriately secured.
Discrepancies
Monitor/Check the Invoices and Report Source documentation (checks, vouchers, etc.) is perforated, voided or otherwise cancelled to prevent
135 Unauthorized checks are issued.
Discrepancies reuse.
Monitor/Check the Invoices and Report The disbursement process is automated to generate checks based on invoice payment due date and
136 Payment may be disbursed for goods and services not received.
Discrepancies post the appropriate accounting entries.
Receive and Input Invoices into the Company’s Invoices are approved by appropriate personnel in accordance with the Authority Limit Table for proper
Systems/Log Books functioning.
Receive and Input Invoices into the Company’s The concerned/appropriate personnel of each business unit periodically reviews and updates the
Systems/Log Books Authority Limit Table.
Receive and Input Invoices into the Company’s Periodically, a report is prepared and the exceptions are analyzed and investigated by the accounts
139 Invoice does not match the receiver documents.
Systems/Log Books payable supervisor and reported to the accounts payable manager.
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Receive and Input Invoices into the Company’s Appropriate matching between invoices, receiving documents and purchase orders may not be When matching the receiver and invoice in the system, the accounts payable clerk must enter a valid
140
Systems/Log Books performed. purchase order number.
Invoice approval is received at the department level. Authorized personnel within the department review
the invoices and sign them, indicating that they are valid and approved for payment. Upon receipt,
invoices are date/time stamped for tracking purposes.
Receive and Input Invoices into the Company’s
141 Invoices are not properly authorized, complete, accurate and timely. The accounts payable clerks review the invoices, noting that appropriate approval was obtained and that
Systems/Log Books
proper coding was assigned prior to entry into the system. The system/software requires the appropriate
manager (as defined by the "Approved By" list) to change the batch of goods status from pending to
approved in order for the batch to post.
Receive and Input Invoices into the Company’s Special attention will be made on the decimal point entry procedures. The system/software has been
Systems/Log Books configured to display a warning message reminding users to input the decimal point.
Receive and Input Invoices into the Company’s All checks over a certain amount as directed by the company are copied and routed to accounts payable
Systems/Log Books to match with the applicable voucher.
144 Invoices are not properly authorized, complete, accurate and timely. The invoices are coded and password protected to ensure protection of the invoices.
Systems/Log Books
145 Invoices are not properly authorized, complete, accurate and timely. Invoices are checked for mathematical accuracy.
Systems/Log Books
Processing procedures provide for input verification of critical voucher fields (e.g., vendor, invoice
146 Invoices are not properly authorized, complete, accurate and timely. amount, account coding, quantities, part number, etc.) through manual batch controls, edit exception
Systems/Log Books
reports and/or online system edits.
147 Discrepancies exist between amounts on supplier invoice and supporting documents. Suppliers of goods/services are instructed to forward invoices directly to accounts payable.
Systems/Log Books
Receive and Input Invoices into the Company’s The software/system tracks all open invoice issues and is reviewed by the accounts payable supervisor
148 An open, unresolved invoice may not be posted by the closing deadline.
Systems/Log Books at the end of each month to ensure open items are cleared.
Receive and Input Invoices into the Company’s Invoices which are held from payment due to system or processing errors are required to be resolved
Systems/Log Books within a certain number of days.
Receive and Input Invoices into the Company’s Invoices and new supplier requests are required to be processed by the accounts payable group within a
Systems/Log Books specific number of hours of receipt of the invoice/requests at the corporate location.
Receive and Input Invoices into the Company’s The company has established tolerances for commodity purchases, as appropriate receipts in excess of
151 There is a discrepancy between the amounts on the supplier invoice and supporting documents.
Systems/Log Books the tolerances may be returned to the vendor.
152 There is a discrepancy between the amounts on the supplier invoice and supporting documents. system generates the next check number, which must match the check number in the routing code at
Systems/Log Books
153 There is a discrepancy between the amounts on the supplier invoice and supporting documents. Trends in amounts and types of adjustments are periodically analyzed.
Systems/Log Books
Receive and Input Invoices into the Company’s Purchase cost files are maintained and current. The company has a policy to only pay the purchase
Systems/Log Books order price, regardless of the price on the invoice.
Receive and Input Invoices into the Company’s Invoices may be received but never reported or reported inaccurately; this could result in a misstatement
155 The accounts payable specialist stamps the invoice with the date that it was received once received.
Systems/Log Books of unrecorded liabilities.
The accounts payable specialist sends out a reminder before month-end close to all employees
reminding them to submit all expense reports or advise on the estimated amounts to accrue for
Receive and Input Invoices into the Company’s Invoices may be received but never reported or reported inaccurately; this could result in a misstatement
156 unprocessed travel and expenses. The accounts payable specialist creates a journal entry for all
Systems/Log Books of unrecorded liabilities.
unprocessed invoices and the accounting manager reviews this journal entry for the open invoice
accrual account.
Receive and Input Invoices into the Company’s Invoices may be received but never reported or reported inaccurately; this could result in a misstatement Receiving enters all receipts only against an open purchase order in the system. The purchase order
157
Systems/Log Books of unrecorded liabilities. receiver processing options have been configured to receive by purchase order.
Receive and Input Invoices into the Company’s Regular reporting, investigation, and follow-up on backlog of unprocessed vendor invoices, receiving
Systems/Log Books reports, or rejected data is conducted.
159 Quantities received differ from quantities billed on the invoice. HOLDs (Account, Funds, Invoice, Matching, Variance) are utilized for non-matching invoices.
Systems/Log Books
Receive and Input Invoices into the Company’s A tolerable limit above the purchase order per-unit cost is accepted to minimize minor cost variances
160 Quantities received differ from quantities billed on the invoice.
Systems/Log Books (e.g., tax calculations). These items are reviewed by management for appropriateness.
Receive and Input Invoices into the Company’s Workflow notifications are used to report any modifications to existing suppliers' key fields, remittance
Systems/Log Books info, etc.
162 An open, unresolved invoice may not be posted by the closing deadline. Error messages by the system indicate greater than acceptable tolerance levels, etc.
Systems/Log Books
Receive and Input Invoices into the Company’s The software/system functionality does not permit duplicate invoice numbers; unique transaction IDs are
163 Duplicate invoices are received and processed, leading to duplicate payments.
Systems/Log Books generated.
164 An open, unresolved invoice may not be posted by the closing deadline. Invoices without purchase orders are routed to the appropriate cost center manager for resolution.
Systems/Log Books
Receive and Input Invoices into the Company’s Invoices are only entered for vendors that exist on the approved suppliers list (ASL) in the
Systems/Log Books system/software.
Page 6
166 Tax data (state and local tax [SALT], etc.) associated with an invoice is not accurate and complete. Tax data is captured at point of entry.
Systems/Log Books
Reconcile the General Ledger and Check the
167 Data inconsistency may exist between accounts payable and the general ledger. Accounts payable personnel periodically reconcile payments to the general ledger.
Balance Sheet
168 Data inconsistency may exist between accounts payable and the general ledger. The corporate controller reviews the accounts payable reconciliations monthly.
Balance Sheet
A monthly reconciliation of the accounts payable subledger and the general ledger balance is prepared
169 Data inconsistency may exist between accounts payable and the general ledger. by the concerned personnel. All variances over a certain amount are explained and all non-standard
Balance Sheet
journal entries are reviewed by the concerned personnel.
170 Data inconsistency may exist between accounts payable and the general ledger. Any adjustments to accounts payable are reviewed by the controller and posted to the general ledger.
Balance Sheet
Reconcile the General Ledger and Check the Shipments are checked against packing slips, which are signed by receiving parties and then compared
171 Data inconsistency may exist between accounts payable and the general ledger.
Balance Sheet to the invoices and purchase orders.
The project manager, using a chart of accounts, adds the general ledger account code to every invoice
Reconcile the General Ledger and Check the when it is paid. Before the check can be printed, this the general ledger code must be entered,
Balance Sheet automatically updating the general ledger. the general ledger code appearing on the invoice is then
reviewed by the concerned signing officers before the check is signed.
Reconcile the General Ledger and Check the An individual who does not process, authorize or disburse accounts payable is assigned to reconcile the
Balance Sheet accounts payable bank account each month.
Reconcile the General Ledger and Check the Payable and related accounts may be misstated because of incorrect adjustments or incorrect
174 Payables are not offset against receivables unless first approved by management.
Balance Sheet reclassifications of distributed amounts.
175 Data inconsistency may exist between accounts payable and the general ledger. The accounts payable subsidiary ledger is reconciled with the general ledger.
Balance Sheet
176 Data inconsistency may exist between accounts payable and the general ledger. The accounts payable manager reconciles the accounts payable suspense account regularly.
Balance Sheet
Reconcile the General Ledger and Check the Goods are received for unauthorized or invalid purchase orders and are not appropriately recorded in Where applicable, the system performs a match between the purchase order and scanned goods
177
Balance Sheet the system. received prior to release of the inventory to post in the general ledger.
Reconcile the General Ledger and Check the Adjustments may be approved that are not acceptable to management; this could affect operating The company has established tolerances for commodity purchases as appropriate. Receipts in excess of
178
Balance Sheet results adversely and result in dissatisfied vendors and/or unrecorded liabilities. the tolerances may be returned to the vendor.
Reconcile the General Ledger and Check the Adjustments may be approved that are not acceptable to management; this could affect operating
179 system generates the next check number, which must match the check number in the routing code at
Balance Sheet results adversely and result in dissatisfied vendors and/or unrecorded liabilities.
180 Only managers can review, approve and code professional services and capital invoices for payment.
181 Detail activity may be incorrectly posted in the subsidiary ledger. Documented cut-off and period-end closing procedures are adhered to.
Balance Sheet
182 Trends in amounts and types of adjustments are periodically analyzed.
Reconcile the General Ledger and Check the Adjustments may be approved that are not acceptable to management; this could affect operating User access is designed and configured to support the segregation of duties between procurement,
183
Balance Sheet results adversely and result in dissatisfied vendors and/or unrecorded liabilities. receiving, invoice processing, payment processing and the vendor master.
Reconcile the General Ledger and Check the Adjustments may be approved that are not acceptable to management; this could affect operating Regular reporting, investigation and follow-up on backlog of unprocessed vendor invoices, receiving
184
Balance Sheet results adversely and result in dissatisfied vendors and/or unrecorded liabilities. reports or rejected data occurs.
Reconcile the General Ledger and Check the Adjustments may be approved that are not acceptable to management; this could affect operating A currency threshold is established for checks requiring two signatures (either two manual signatures or
185
Balance Sheet results adversely and result in dissatisfied vendors and/or unrecorded liabilities. one manual signature and one computer-generated signature).
186 Detail activity may be incorrectly posted in the subsidiary ledger. The general ledger accounts are posted through the system/software cross-validation rules.
Balance Sheet
Reconcile the General Ledger and Check the Source documentation (checks, vouchers, etc.) is perforated, voided or otherwise cancelled to prevent
187 Detail activity may be incorrectly posted in the subsidiary ledger.
Balance Sheet reuse.
188 An open, unresolved invoice may not be posted by the closing deadline. Payments are posted prior to being released for payment.
Balance Sheet
Reconcile the General Ledger and Check the Adjustments may be approved that are not acceptable to management; this could affect operating The disbursement process is automated to generate checks based on invoice payment due date and
189
Balance Sheet results adversely and result in dissatisfied vendors and/or unrecorded liabilities. post the appropriate accounting entries.
Page 7

Process Accounts Payable RCM

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Process Accounts Payable RCM

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PROCESS ACOUNTS PAYABLE RISK AND CONTROL MATRIX (RCM)

Monitor/Check the Invoices and Report

Monitor/Check the Invoices and Report

Monitor/Check the Invoices and Report

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