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As a financial steward, it’s increasingly important for a chief financial officer to streamline processes with automation and a structured approval hierarchy.
This easily enables analytical insights, implementing control measures and eliminating low-value repetitive chores.
CFO invoice-approval checklist for strategic oversight —
Budget vs. actual spending analysis: Compare departmental spending figures with budgets. Costs must align with the business financial planning.
Cash flow: Analyze payment terms and how your cash flow is affected. When necessary, maximize working capital by negotiating payment terms.
Handle exceptions: Keep a close eye on flagged items, such as large amounts, non-standard purchases, and invoices that don’t contain a corresponding purchase order.
Manage supplier relationships: Build trust and get the most-favorable payment terms by closely monitoring payments to strategic vendors.
High-level controls —
Carefully segregate: For fraud prevention, separate who approves invoices from those who approve payments.
Approval matrix: There should be an exacting approval hierarchy. You should handle the invoices that are deemed high risk or are higher than the predefined threshold.
Audit trail: For financial reviews and regulatory compliance, implement a digital record with a seamless audit trail. Be sure to maintain it.
Monitor key performance indicators: To guarantee efficiency and effectiveness, regularly review KPIs for your accounts payable process. That includes reviewing invoice processing time and error rates.
Streamline invoice-approval checklist —
Three-way matching: Automate with intelligent software for the majority of invoices. Refrain from manually matching the invoice, purchase order, and receiving report.
Data entry: By using optical character recognition technology for basic data entry, you will eliminate manual entry of invoice details, such as dates, amounts, and vendor information.
Making calculations: Use automation software to verify accuracy of subtotals, taxes and totals instead of manually checking calculations on invoices.
Strategies to Manage Your Vendor Relationships
Structuring recurring tasks and workflows —
Saving time: Install automation to send reminders and invoices. When necessary, escate all requests.
Answering vendor questions: With automation, provide vendors with real-time updates via a secure portal for transparent communication.
Resolving exceptions: Delegate the initial resolutions of exceptions to your accounts payable staff, and save your time and energy for important matters requiring your involvement.
Avoid reactive manual tasks —
Filing: Refrain from management of paper invoices. For efficiency, maintain invoices and documentation for audits with a digital archive.
Invoice risk profiling: Before onboarding voices, utilize technology to screen vendor legitimacy with a trustworthy database.
Five step checklist —
- Review processes: Identify any bottlenecks and ineffieciency by mapping your accounts payable workflow.
- Invest in the right automation-technology: Take into consideration your budget, size and enterprise resource planning systems. (Look for features such as three-way matching, 0ptical character recognition for data capture, and customized approval workflows.)
- Establish a clear, documented accounts payable policy: Set automated approval workflows but include dollar thresholds, and define roles to manage exceptions.
- Staff training: Make certain to adequately train your employees. Focus on potential exception handling.
- Continue monitoring: To make certain of efficiency, continue to monitor your accounts payable KPIs.
Good luck!
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Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.
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