Accounts Payable System
We need a strong payables process so that it provides us with a high-productivity accounting solution to process vendor payments. An integrated payables process provides strong financial control so you can prevent duplicate payments, pay for only the goods and services you order and receive, and maximize supplier discounts. Understand the key features of an effective accounts payable system.
Given below are the key requirements from any automated world class accounts payable system:
Flexibility:
Payables system should provide flexibility for managing and streamlining invoice and payment processing. The flexibility is required in the areas of account structure, multiple calendars, multiple currencies, multiple bank accounts, multiple payment terms and how the system helps entering the information by defaulting linked information from the master data.
Accurate Invoice Processing:
Payables system should provide controls and automations to improve the efficiency of invoice processing and simultaneously help ensuring the accuracy of payables information. Some automation features or best practices are automatically matching an invoice to a purchase order by providing the purchase order number. Defaulting the accounting details and other information based on the matched purchase order.
Invoice Approvals:
As controllership and sox requirement the payable system should support two-, three- and four-way matching of purchase orders, invoices, receipts, and requester acceptance documents. Further it should provide approval mechanisms to ensure segregation of duties.
Multiple Payment Types:
System should provide capability to handle every form of payment, including manual payments, wire transfers, bank drafts, electronic funds transfers, and automatic checks. Further these payments should automatically or manually reconcile with the bank statements.
Supplier Interface:
System should enable resolve business issues quickly by providing immediate and accurate responses to supplier inquiries. Ability to view Invoice and Payment status information together to take informed decisions and have a meaningful conversation with the supplier.
Additional Information:
Ability to record detailed information about suppliers, including their purchasing, payment, and invoice processing preferences, flexible address formatting for global operations.
Electronic Data Interchange (EDI):
This allows exchanging payables data with external parties like banks and suppliers. Ability to use EDI drastically reduces many manual steps.
Pay on Receipt:
This is a financials feature that automatically creates supplier invoices based on receipts and purchase orders information. An advanced feature will automatically create matched invoices, automatically approve invoices and then make EDI or other electronic payments to the supplier.
Open Interfaces:
Ability to bring procure to pay data from other systems to the payables system.
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Miscellaneous Warehouse Processes
At the end of each inventory control, the Contractor provides the Ordering Person with an inventory report which contains a list of all stock adjustments. The Ordering Person uses the report to create, by use of his/her own means, necessary value and accounting adjustments related to the stock. Let us look at some to the mislaneous warehouse processes not covered earlier.
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When a customer wants a product that has been stored in the warehouse, the same need to be picked off the shelf (or off the floor) and get it ready for shipping. Depending on how big is the warehouse, picking can take a while. (Many distribution centers cover more than 1 million square feet.). Hence, warehouse order picking methods are an important aspect within any warehouse.
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When products arrive at a facility, there need to be a defined process to let them in. The process for accepting inventory when it arrives is called "Receiving". Any warehousing operation must be able to receive inventory or freight from trucks at loading docks and then stow them away in a storage location. Receiving often involves scheduling appointments for deliveries to occur, along with unloading the goods and performing a quality inspection.
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Before shipping, businesses need to make sure that the items will arrive in good condition. Packaging is a form of protection against environmental threats that the product will face from the time it leaves warehouse facility until the time it reached the customer. The packaging is intended to provide protection for the item as it is being handled in the warehouse or when the item is being shipped.
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Transport operations are often divided into full load and part load and due to economies of scale, the unit costs are higher for part loads. Our customer needs several part loads delivering, so it can reduce costs by consolidating these into full loads. Then it gets all the part loads delivered to a warehouse near the suppliers, consolidates them into full loads, and pays the lower costs of full-load transport to its operations.
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What is the difference between Warehouse Management & Inventory Management?
The terms “inventory management” and “warehouse management” are sometimes mistakenly used interchangeably as they both deal with operations and products of industries. Despite their few similarities, there are many notable differences between warehouse and inventory management systems.
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Warehouses can be places where piles of packed or loose products occupy space. If left disorganized, it will become very challenging to identify products for packing or picking. Hence, proper organization of warehouse is very important. Warehouse labeling systems eliminate this problem by making sure products are easily identified and managed during the warehousing and shipping process. Labeling is the most functional and cost-effective way to keep your warehouse organized and operating efficiently.
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After products have been received and passed a quality inspection, they need to be stored so that you can find them when you need them. This process is called putaway. The spot where you store a particular product is called a location. One section of a warehouse might have small locations for light items; another area may have large locations on the floor for heavy items.
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The Outbound process starts with routing the shipments. The Outbound execution process starts from the point when pick tasks are completed for an outbound shipment and ends at the point where the outbound packages are loaded into trailers. The Warehouse Outbound process includes managing and controlling outgoing materials starting from the download of orders through to the shipping of products from the warehouse.
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Large companies have huge number of suppliers. To remain competitive they need to manage their procure to pay process very effectively. They create specialized division to handle these operations.
