Q: We process numerous payment requisitions for non-invoice-related items.

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We are revisiting our current numbering scheme (REQmmddyy) to determine if our current method is the best way to minimize the risk of duplicate payment. Combining the dollar amount and the vendor number poses some issues as we do have payments to the same vendor for the same dollar amount that pertain to different services that we process on the same day. What are other best practices?

A: A non-invoice numbering convention is dependent on several factors, including your accounting system's capability regarding alpha and numeric character combinations and the number of characters it can accept. You might consider some of the following questions as you change your numbering convention:

  • Do you want the invoice number to be easily referenced or identifiable so that your data entry specialists don't spend much time with direct data entry or doing vendor invoice lookups? In this case, you might consider a combination of alpha and numeric characters that represent the vendor code, dollar value and date.
  • Are you focused on data entry productivity and therefore, is it the speed at which they enter the information that is important? In this case, keep the number of characters to a minimum and probably keep it focused on numeric keys so that the data entry specialist doesn't have to move between the alpha key pad and the numeric key pad.
  • Do you need to consider departments where the department number in the invoice number would assist in lookup reference and maybe allow you to use the dollar amount and date as part of the number and still avoid "the same day same amount to the same vendor" problem?

    If the focus is on internal control because you have had too many duplicate rejections, then you might consider in your alpha characters using a numeric to represent the alpha? An example would be REQ becomes R3Q.

    Below are some examples of the invoice numbering conventions:
  • The first three letters of the vendor's name and the transaction date
  • Combination of vendor code, invoice amount and transaction date
  • Combination of department code, alpha characters representing the purchase type (REQ in your example), invoice amount and transaction date
  • The shorter the number of key strokes and alpha characters the better your opportunity to maintain or increase data entry productivity.

    This is also a good question to ask some of your peers in our Forums and post a question about how others have set their numbering conventions. You can also address the question based on the type of accounting system that you are using.

 

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