Accounts Payable Best Practices Series

Thu, Apr 12, 2012 @ 09:31 AM

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ERP and Accounting Softwares Fall Short of Delivering what Accounts Payable Departments Really Need  PART 1

Modern ERP and Accounting Software packages often come with payment automation technology built in to their systems. This includes the ability to print business checks using a desktop laser printer and make electronic ACH payments with remittance detail delivered directly to a payee via email.

We are often asked why a business should use a third-party payment platform if the company’s accounting system or ERP has the technology built-into it.

The most important reason:

Security and control of the process should be the single most important consideration that a company should have regarding the automation of payments.

There are three ways that most accounting and ERP systems fail to deliver the security that an organization needs most.

First, we find that check printing directly from an Accounting or ERP system to a desktop laser printer can typically be performed by anyone who has access to the Account Payable module. 

Best practices for AP dictate that there should be a separation of duties between entering checks and printing checks.  Even when a system specifies this separation, most ERPs allow anyone with “checkwriting access” to print checks. 

Look for a payment system that separates duties at the log-in level… by the use of a password access to gain access to the printing feature, thereby ensuring that only the users who have printing rights can perform the check printing. Also keep in mind that in addition to separation of duties, one should seek a system that tracks each user’s activities by an application’s audit report.

Next, consider the printer. 

A standard desktop laser printer can be switched in to “Copy” mode or have a built-in “Reprint” button that can be enabled after a document is sent to it.  This is a deal-breaking security concern.  An unscrupulous individual may print a check to the printer, switch the printer in to copy mode and reprint an unlimited, unaudited number of reprinted negotiable documents.

Always seek a check writing software that works exclusively with certified MICR printers that have the “Copy” and “Reprint” feature disabled.   

Finally, many desktop printers also have a built-in memory.  Again, the wrong person with access to a printer may be able to “extract information” from memory and create negotiable documents. 

For this reason we recommend that printers are secured through a special setting which will “wipe clean” all memory after a check run is printed.   

There are a variety of other reasons we encourage companies to consider handling payables outside of their ERP systems.  Part 2 of this series will provide more insights. 

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