Once the invoice is received, the accounting personnel should check if it matches the pending purchase order. The data introduced in the accounting system should roughly include the following: the current date, the invoice date, the purchase order number, the General Ledger account number and the amount of the actual invoice.
The check must be completed and any supporting documentation should be attached and forwarded to the Office Manager for approval before the actual check can be processed or made. As for the status of the check, the Accounts Payable Department should be contacted if there are any difficulties and questions. Any supporting document might also be mailed with the check by the AP Department, should the requestor make such a demand.
Various problems regarding checks might arise. For instance, a check is deemed invalid and voided if there is an error in the payee amount, if the error occurred during the printing of the check, if a duplicate payment has been made, if the cancellation of the payment is requested, or if there is any other reason for which the check cannot be sent to the payee. The procedure should be as follows: immediately after determining that a check should be voided, the responsible person should mention it on the face of the check (write "VOID," for instance), write a brief explanation regarding why the check was not issued on the stub of the check, and remove or cut the signature from the check. A controller has to process and journalize the checks voided by the Accounts Payable Department.
Adequate segregation of accounting duties is an excellent way of fighting against fraud. The person who records cash receipts (including checks) should not also record the accounts receivable activity. The person who prepares or approves payroll should not be the one to distribute payroll checks. The person who prepares accounts payable checks should not prepare the organization's bank reconciliation.
The reconciliation of the bank statement is an important operation, since it helps detect total outstanding checks added...
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