Can you please explain drivers for the following: GRIR; reconciliation of vendors; periodic AP activities?

Follow

GRIR (goods receipt / invoice receipt): This clearing account is used to clear receipts against invoices. It can also be used to see:

  • When an item is received and there is no invoice after xxxx days to call the supplier before past due and get a copy;  
  • If there is an invoice and no receipt in xxxx days, trigger an auto email to the requestor to receive items into system;
  • When closing the books, receipts received and not invoiced could be accrued and then reversed next month.


Reconciliation of vendors: The process auditors use is to request a full statement of account from the supplier for a certain time frame and ensure that the AP vendor master file history has a record of all invoices, credits and cash on account for the same time frame.

Periodic AP activities include:

  • Low-value check runs: Do not process checks under $10.00 in regular check runs, but only run these once a month
  • Batch foreign payments monthly, to save money in purchasing foreign currency
  • Annually request full statements from suppliers; check invoices/credits/cash on account (COA)—validate address, research and collect all credits/COA, eliminate reason(s) COA happened, for example, duplicate payments.
  • Vendor master file audits:  

              - Look for duplicates: search by tax ID or use zip code (unique identifiers)
              - Close/deactivate vendors that have done no business within a specified number of months (minimum of 13 months history, so as not to deactivate vendors of annual supplies)
              - Validate that 1099/1042 status is properly identified
              - Obtain missing tax ID's (best class: all vendors; minimum: all unincorporated vendors)

  • Run an aged trial balance report and look for:

              - Credit balances:  on top (from an AP prospective)
              - Old invoices aging and not paying top dollar down (below credit balances)

Have more questions? Submit a request

Comments