Accounting Best Practices -- Contents -- Preface -- Chapter 1: Overview of Best Practices -- Chapter 2: How to Use Best Practices -- Types of Best Practices -- The Most Fertile Ground for Best Practices -- Planning for Best Practices -- Timing of Best Practices -- Implementing Best Practices -- Best Practice Duplication -- Why Best Practices Fail -- The Impact of Best Practices on Employees -- Summary -- Chapter 3: Accounts Payable Best Practices -- Implementation Issues for Accounts Payable Best Practices -- 3-1 Pay Based on Receiving Approval Only -- 3-2 Reduce Required Approvals -- 3-3 Use Negative Assurance for Invoice Approvals -- 3-4 Designate Approval Stamp Positioning -- 3-5 Base Approvals on Supplier Invoicing History -- 3-6 Use Procurement Cards -- 3-7 Use a Ghost Card -- 3-8 Negotiate Procurement Card Rebates -- 3-9 Route All Invoices Directly to Accounts Payable -- 3-10 Split Payables Processing Based on Discounts -- 3-11 Adopt a Standard Invoice Numbering Convention -- 3-12 Automate Three-Way Matching -- 3-13 Digitize Accounts Payable Documents -- 3-14 Directly Enter Receipts into Computer -- 3-15 Have Suppliers Include Their Supplier Number on Invoices -- 3-16 Request that Suppliers Enter Invoices through a Web Site -- 3-17 Audit Expense Reports -- 3-18 Automate Expense Reporting -- 3-19 Eliminate Cash Advances for Employee Travel -- 3-20 Link Corporate Travel Policies to an Automated Expense Reporting System -- 3-21 Match Travel Bookings to Expenses -- 3-22 Centralize the Accounts Payable Function -- 3-23 Store Late Fees in a Separate General Ledger Account -- 3-24 Issue Standard Account Code List -- 3-25 Link Supplier Requests to the Accounts Payable Database -- 3-26 Shrink the Supplier Base -- 3-27 Withhold First Payment until W-9 Form Is Received -- 3-28 Automate Payments for Repetitive Invoicing.

3-29 Install a Payment Factory -- 3-30 Eliminate Manual Checks -- 3-31 Eliminate Wire Transfers -- 3-32 Increase the Frequency of Check Runs -- 3-33 Settle Foreign Intercompany Payables -- 3-34 Have Regularly Scheduled Check-Signing Meetings -- 3-35 Implement Positive Pay -- 3-36 Incorporate Copy Protection Features into Checks -- 3-37 Avoid Acronym Payees on Checks -- 3-38 Revise Payment Terms for Electronic Payments -- 3-39 Install Advanced ACH Debit Blocking -- 3-40 Use a Signature Stamp -- 3-41 Notify Purchasing of Lower Invoiced Prices or Terms -- 3-42 Create Direct Purchase Interfaces to Suppliers -- 3-43 Install a Low-Cost Spend Management System -- 3-44 Use Blanket Purchase Orders -- 3-45 Issue a Welcome Packet to New Suppliers -- 3-46 Clean Up the Supplier Master File -- 3-47 Adopt a Supplier Naming Procedure -- 3-48 Assign Payables Staff to Specific Suppliers -- 3-49 Create Different Supplier Accounts for Different Terms -- 3-50 Review Supplier Statements for Open Credits -- 3-51 Issue Standard Adjustment Letters to Suppliers -- Summary -- Chapter 4: Billing Best Practices -- Implementation Issues for Billing Best Practices -- 4-1 Avoid Missed Billings -- 4-2 Remove Unnecessary Information from Invoices -- 4-3 Mark Envelopes with Address Correction Requested -- 4-4 Do Early Billing of Recurring Invoices -- 4-5 Have the Sales Staff Review Contact Information for Recurring Invoices -- 4-6 Review Billed Hours Early -- 4-7 Issue Electronic Invoices -- 4-8 Issue Single, Summarized Invoices Each Period -- 4-9 Print Separate Invoices for Each Line Item -- 4-10 Enhance the Invoice Layout -- 4-11 Add Receipt Signature to Invoice -- 4-12 Automatically Check Errors during Invoice Data Entry -- 4-13 Proofread Invoices -- 4-14 Have Delivery Person Create the Invoice -- 4-15 Computerize the Shipping Log.

4-16 Track Exceptions between the Shipping Log and the Invoice Register -- 4-17 Eliminate Month-End Statements -- 4-18 Reduce Number of Parts in Multipart Invoices -- Summary -- Chapter 5: Budgeting Best Practices -- Implementation Issues for Budgeting Best Practices -- 5-1 Link the Budget to Key Business Drivers -- 5-2 Clearly Define All Assumptions -- 5-3 Clearly Define All Capacity Levels -- 5-4 Establish Project Ranking Criteria -- 5-5 Apply Throughput Analysis to Capital Budgeting -- 5-6 Establish the Upper Limit of Available Funding -- 5-7 Identify Step-Costing Change Points -- 5-8 Budget for Attrition -- 5-9 Budget by Groups of Staff Positions -- 5-10 Create a Summarized Budget Model for Use by Upper Management -- 5-11 Include a Working Capital Analysis -- 5-12 Use Activity-Based Budgeting -- 5-13 Incorporate Target Costing into the Budgeting Process -- 5-14 Link a Bonus Sliding Scale to the Budget -- 5-15 Use Flex Budgeting -- 5-16 Incorporate Risk Analysis into Budget Modeling -- 5-17 Automatically Link the Budget to Purchase Orders -- 5-18 Issue a Budget Procedure and Timetable -- 5-19 Preload Budget Line Items -- 5-20 Adopt Two-Stage Capital Budgeting -- 5-21 Purchase Budgeting and Planning Software -- 5-22 Reduce the Number of Accounts -- 5-23 Revise Budgets on a Quarterly Basis -- 5-24 Simplify the Budget Model -- 5-25 Use Online Budget Updating -- 5-26 Operate without a Budget -- Summary -- Chapter 6: Cash Management Best Practices -- Implementation Issues for Cash Management Best Practices -- 6-1 Access Bank Account Information on the Internet -- 6-2 Automatically Apply Cash -- 6-3 Avoid Delays in Check Posting -- 6-4 Require Mailings to Mailstop Number -- 6-5 Collect Receivables through Lockboxes -- 6-6 Install Remote Deposit Capture -- 6-7 Consolidate Bank Accounts -- 6-8 Implement Physical Cash Sweeping.

6-9 Implement Notional Pooling -- 6-10 Charge Back Treasury Fees to Subsidiaries -- 6-11 Implement Controlled Disbursements -- 6-12 Negotiate Faster Deposited-Check Availability -- 6-13 Open Zero-Balance Accounts -- Summary -- Chapter 7: Collections Best Practices -- Implementation Issues for Collections Best Practices -- 7-1 Accept Check Payments by Fax -- 7-2 Clearly Define Account Ownership -- 7-3 Optimize the Collections Staff -- 7-4 Designate a Skip Tracing Specialist -- 7-5 Utilize Collection Call Stratification -- 7-6 Structure the Workday Around Prime Calling Hours -- 7-7 Base Deduction Management on Transaction Volume -- 7-8 Set Up a Periodic Payment Schedule -- 7-9 Require Customer Billing of Marketing Deductions -- 7-10 Grant Percentage Discounts for Early Payment -- 7-11 Conduct Immediate Review of Unapplied Cash -- 7-12 Outsource Collections -- 7-13 Prepare a Customer Bankruptcy Action Plan -- 7-14 Sell Your Bankruptcy Creditor Claim -- 7-15 Simplify Pricing Structure -- 7-16 Write Off Small Balances with No Approval -- 7-17 Report on Bad Debts by Salesperson -- 7-18 Post Collection Results by Collector -- 7-19 Create an Accurate Bad-Debt Forecast -- 7-20 Use Automated Clearing House Debits -- 7-21 Lock Access to the Credit-Hold Flag -- 7-22 Maintain Customer Orders Database -- 7-23 Subscribe to Special Event Notifications -- 7-24 Set Up Automatic Fax of Overdue Invoices -- 7-25 Issue Dunning Letters Automatically -- 7-26 Automate E-Mail Delivery of Overdue Invoice Information -- 7-27 Use a Collection Call Database -- 7-28 Access Up-to-Date Collection Agency Information -- 7-29 Implement Customer Order Exception Tracking System -- 7-30 Install a Dispute Tracking System -- 7-31 Report on Ongoing Customer Complaints -- 7-32 Link to Comprehensive Collections Software Package -- 7-33 Use Real-Time Cash Application Techniques -- Summary.

Chapter 8: Credit Best Practices -- Implementation Issues for Credit Best Practices -- 8-1 Create a Credit Policy -- 8-2 Modify the Credit Policy Based on Product Margins -- 8-3 Modify the Credit Policy Based on Changing Economic Conditions -- 8-4 Modify the Credit Policy Based on Potential Product Obsolescence -- 8-5 Centralize Credit Risk Analysis -- 8-6 Preapprove Customer Credit -- 8-7 Subscribe to a Credit Report Database -- 8-8 Create an Internal Credit Scoring System -- 8-9 Modify Credit Application Terms to Favor the Company -- 8-10 Create a Credit Application Guidebook -- 8-11 Create a Standardized Credit-Level Determination System -- 8-12 Incorporate Collections Information into Credit Decisions -- 8-13 Require a New Credit Application if Customers Have Not Ordered in Some Time -- 8-14 Review the Credit Levels of All Customers Who Stop Taking Cash Discounts -- 8-15 Call New Customers and Explain Credit Terms -- 8-16 Issue a Payment Procedure to Customers -- 8-17 Join an Industry Credit Group -- 8-18 Refer a Potential Customer to a Distributor -- 8-19 Require Intercorporate Guarantees -- 8-20 Obtain Check Verification and Guarantee Coverage -- 8-21 Obtain Credit Insurance -- 8-22 Obtain an Export Credit Guarantee -- 8-23 Shorten the Terms of Sale -- 8-24 Insist on Lien Rights -- 8-25 Offer a Financing Program -- 8-26 Combine COD Terms with a Surcharge -- Summary -- Chapter 9: Commissions Best Practices -- Implementation Issues for Commissions Best Practices -- 9-1 Automatically Calculate Commissions in the Computer System -- 9-2 Calculate Final Commissions from Actual Data -- 9-3 Construct a Standard Commission Terms Table -- 9-4 Periodically Issue a Summary of Commission Rates -- 9-5 Simplify the Commission Structure -- 9-6 Include Commission Payments in Payroll Payments -- 9-7 Lengthen the Interval between Commission Payments.

9-8 Pay Commissions Only from Cash Received.