What is the industry standard for inter-office routing of checks?


We are establishing a new business rule that will eliminate the ability for the requester to receive the check via inter-office mail for delivery to the vendor and are receiving push back from our requesters.

How are checks distributed for activity such as seminar or conference registration, royalty payments, regulatory payments?


A: Handling of checks involves important control issues. (Also see the Internal Controls checklist and our Sarbanes-Oxley content.) You are right to push the new rule. It is not a good practice to give checks to the check requesters because such a policy creates a situation in which it is easy for someone to commit fraud. With regard to dealing with push back, if you have external auditors, bring the former practice to their attention. They can provide you with cover. Let it come from them, an independent, authoritative entity. Barring that, enlist the support of senior managers by explaining the ramifications of the old policy. Do some homework on Fraud (there's a lot of material available on TAPN, also check with theAssociation of Certified Fraud Examiners and present the information to management. Let the directive come from them.

As far as alternative methods of handling various kinds of payments, there is really no reason why conference registrations, royalty payments or regulatory payments can't be disbursed directly to the payee. Why should they go back to the requester? If a specific order form or cover letter needs to accompany a check, create a process for submission and attachment of such documents to the checks in AP. Use of a p-card can take care of conference registrations (or employees can register using personal credit cards and then get reimbursed).

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