What other companies doing to keep their on-demand requests for payment (hand checks) to a bare minimum? What sort of policies do they have and what sort of resistance did they encounter upon implementation? What scenarios constitute an on-demand check?


A: The question of on-demand requests for payments (also known as rush, manual, emergency or ASAP checks) is one of company policy. In theory it would be best to avoid them entirely. However, that tends to be impossible in actual practice. Nevertheless it is a best practice to keep the number of on-demand checks to a minimum. Too many rush checks mean weak internal control and can lead to errors and duplicate payments, and put you at risk for fraud. They are also, of course, disruptive. It is impossible to avoid them in all situations, but they should be true exceptions.

Help can be found in providing alternatives to cutting an on-demand check such as use of p-cards or ACH transactions. Controls should be in place around on-demand checks, such as requiring a system search, keeping a log of all on-demand checks issued, and asking (and documenting) the reason for the on-demand check. When a requestor is required to document his or her reason for it, the on-demand check may prove unnecessary. Proper communication of relevant AP schedules, policies and procedures can also help to prevent rush checks.

Enlist the support of senior management for a policy change by discussing with them the risks and problems of rush checks. In formulating a new policy, be sure you analyze what is behind the current level of on-demand check requests, then strengthen policy and procedures to address the issues while firming up an exception policy for on-demand check requests. Includes the criteria and circumstances acceptable for issue of an on-demand check. Finally, post your questions in the TAPN Forums to ask other AP department managers what they have done to get rush checks under control.

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