Accounts Receivable Staff Cross-Training in Accounts Payable

Accounts receivable specialist and PCM Corp Production Manager Rola Pyper discusses 10 lessons she learned when cross training accounts payable.

At one point in my career, I held the position of Accounting Manager for a large company, which meant I oversaw both the Accounts Receivable and the Accounts Payable departments. I spent mornings making collections calls and afternoons fielding collection calls. It was an enlightening experience. Before I knew it, I found that I was using many of the "excuses" that I had heard over and over again! My challenge in this Accounts Payable role was not a company cash flow issue, but rather that our internal processes were complicated and time-consuming.

We all know there are many benefits to cross-training within an organization. However, for some reason, cross-training accounts receivable staff and credit staff is often over-looked. Although I was passionate about collections, I didn't realize how much I would learn by sitting in the seat of accounts payable. By understanding some of the challenges faced by accounts payable staff from first-hand experience, I was able to speed up the recovery process as an outcome.

From an accounting standpoint, invoicing a customer involves a lot fewer steps than processing a payable. It is a bit more difficult to "correct" a payables error, in part because expenses are accrued in the month the expense is incurred. A "missed" or unplanned payable can throw a wrench into revenue and expense projections.

When cross training in accounts payable I learned a few things along the way that helped me in the recovery industry, which I would like to share with you.

  1. Some organizations will not input invoices into the system until the approval process is complete. The expenses are accrued, and the invoice is inputted after.  This is, in some cases, the reason why accounts payable staff do not show the invoices in their system, even though multiple copies have been sent. In some instances, the cost is problematic, and there is a reluctance to approve it, and the approver keeps 'setting it aside' to deal with at another time.
  2. Get your approvals on invoices ASAP. Employees come and go. Once an employee has left an organization, it is tough to obtain subsequent approvals.
  3. Approval and G/L coding are required to "pay" an invoice, and depending on the availability of approvers, this can cause delays. There are often other specific requirements as well, such as PO's, Order #'s, Approval codes/names, AFE #, (Authorization for Expenditure) and so on. The delays can be compounded when dealing with multi-branch organizations.
  4. Be aware of customer's scheduled cheque runs.
  5. Many businesses will not pay a 'late" fee or "service" fee without an "invoice" document, yet many companies will not provide this as it is not an actual "service" or a "product."
  6. Many A/P departments are instructed to disregard assigned payment terms altogether and enter all invoices with Net 30 payment terms (or longer in some cases, as with some oil and gas companies).
  7. Accounting systems have the option to generate a 'Quick Pay' or "On -Demand" cheque, so it is not always necessary to wait "until the next cheque run."
  8. A/P staff are often used as "shields" between suppliers and management. Sometimes A/P will have a cheque ready but will be advised to hold for release until such a time that they are prepared for funds to clear their bank. I have even seen instances where cheques have been pulled from the mail, or payment has been otherwise withheld unbeknownst to the Accounts Payable team.
  9. Be wary of cheques that are being released long after the cheque date. This is usually indicative of a cash flow issue. By generating the cheque, the customer has technically relieved the payable, but if the cheque is never released, it never clears the bank.
  10. And finally, I always found it helps to build relationships when dealing with Accounts Payable staff. In many organizations, successful Accounts Receivable departments are recognized. Managers will publicly congratulate the team on recovery results. But no one ever called up an A/P Manager and said, "that was a great cheque run. It felt good to watch all that money leave our bank account."
    All joking aside, accounts Payable staff are often overlooked and not always adequately recognized for their work.  Sometimes, a little kindness goes a long way!

Also, check out this online article entitled, 6 Major Benefits of Cross Training Employees.

If you liked this article, you might like our newsletter! Get credit & collections articles, tips, and videos. Unsubscribe anytime.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.