Accounts Payables is the money owed by a business to its suppliers and vendors for purchase of materials or services – such as utility bills, payment to sub-contractors, credit card payments etc. In typical small or mid-sized businesses, the accounts payable function is performed by the business owner or an employee/bookkeeper of the organization. As the volume of payables increases, accounts payable can be a distraction to the business owner. Often cash disbursements for payables are a source of fraudulent activity in many businesses. Therefore, it is very important for all businesses to have appropriate controls on the payables function. Most fraudulent activities occur at cash disbursement stages. According to the 2006 Report to the Nation on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners, "The median [fraud] loss suffered by organizations with fewer than 100 employees was $190,000 per scheme…higher than the median loss in even the largest organizations. Small businesses continue to suffer disproportionate fraud losses."
All businesses, small or large, benefit from incorporating internal controls in their organization. Segregation of duties is the easiest and most effective internal control. However, most small businesses find implementing internal controls since it is difficult and expensive to have various employees performing different functions within their organization. Typical small businesses have one employee performing most of the tasks in each department.
Our payables management services can help your small business improve your efficiency, convenience and streamline the internal controls to avoid fraud by
- Posting the bills into the accounting system
- Generating open payables report for approval
- Making cash disbursements with your approval