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EXPENDITURE CYCLE

ControllerChief Accountant

Q1	I need to ask you some questions about the accounts payable function. How are invoices received?
A1	We have various members of the accounting team opening the mail each day in pairs. Any invoice received from vendors are passed to one of the receiving clerks.
Q2	What do the receiving clerks do with the invoices?
A2	They first confirm the mathematical accuracy of the invoiceand check the invoice details against the relevant purchase order and pack slipif everything matches they approve the invoice.
Q3	What happens if there is a problem with an invoice?
A3	The receiving clerk contacts the supplier directly to resolve the issue, stamps the incorrect invoice as void, and waits for an entirely new invoice from the supplier.
Q4	How is the Accounts Payable subsidiary ledger adjusted?
A4	On a daily basis a receiving clerk prepares a summary report for the bookkeeper listing out invoices received during the day. The bookkeeper does the posting and prepares a journal voucher documenting the entries.
Q5	How does the company issue payment?
A5	Each Friday, the cashier prepares checks for all approved vendor invoices due to be paid the following weekone combined check is sent when several invoices from the same vendor are due in the same week. The cashier determines that the checks are correctly made out, signs the checks, stamps the vendor invoice as paid using a PAID stamp to avoid duplicate payment; and mail the check to the vendor.
Q6	What happens if a discount will be missed by the regular check run?
A6	If a discount of more than $50 would be missed by the schedule, then a special check run is made.
Q7	What happens next?
A7	The cashier sends a copy of the check stub to the bookkeeper for posting to the general ledger and preparation of a journal voucher.