Redesigning AP organization question:

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"I am redesigning our AP organization. I would like to group specific types of work, such as a group handling process improvement, reporting and controls, and problem resolution. I am struggling with Vendor Maintenance, as I am not sure where to fit it in. They would handle mail, invoice sorting, and vendor maintenance. Do you have any best practice info on how best to organize AP groups? I am also unsure in what group to cover personal expenses, p-card and corporate card admin tasks and related handling and investigation."

We have not found one particular way to organize an Accounts Payable group because there are many factors that go into it, such as your industry, your system capabilities, degree of manual vs. electronic processes, number of transactions, type of transactions, domestic vs. international processing, etc. However, with that said here are some thoughts around structure and questions to ask your team as you build it.

Questions

  • What transactions cost your organization the most effort (time)?
  • What is the breakdown between the manual vs. electronic transaction volume? Where are there opportunities to increase the electronic processing?
  • What is the natural progression for the input, processing, and output in your production? Are you mainly looking at invoices coming through with a three-way match (PO, receiving document, and invoice matched) or an authorized signature on an invoice?
    • Are your work groups in the same location? Same building? Same floor?
  • Do you have good separation of duties for internal control? For example, your vendor setup should be done by personnel who are independent from the invoice data entry, check processing, mail sorting, and invoice filing processes.

Articles on TAPN

Here are some articles for research on structure and how others have done it, and tools to use.

  • AP profile: Dell Computer
  • The AP Organizational Structure: Where to go from here?
  • Shared Services Implementation: A Case History
  • HR organizational chart tools (see the various organizational chart setups)

In regards to the personal expenses such as travel and entertainment (T&E), depending on the company size (say number of employees), some companies may have this group setup separately. If it is an independent group, it is usually due to the large volume of transactions and payments. In addition, T&E transactions can require special handling due to tax implications not only with 1099 reporting but also with employee reimbursements subject to inclusion in their wages.

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