We had a note this week from a reader concerned about how to handle employees offended by segregation of duties requirements. While public companies can hide behind Sarbanes Oxley mandates, private companies don't have that luxury. Employees are sometimes annoyed when they cannot do more than a few tasks due to fraud concerns. They take it personally. "Does the company really think I'd steal?," or "Don't you trust me?" are refrains heard more than occasionally from a miffed employee.

Already frayed relations with other departments can be pushed to the breaking point when an employee takes limitations (like the right to change addresses in the master vendor file) as a personal insult. The issue becomes even more explosive at smaller companies when employees from other departments have to be brought in to handle certain tasks (like master vendor file maintenance) in order to achieve appropriate segregation of duties.

We'd like to hear from readers who've faced this challenge and how they dealt with it. Please send your comments to publisher@ap-now.com and as always, we'll share all comments with everyone who responds. We'd like to hear from you about your experiences even if you haven't come up with a satisfactory solution.

A Dozen Invoice Best Practices to Improve Profitability: An Easy Get-in-Shape Plan for Your Dept.

When even just a simple thing like an invoice is not handled properly it can turn into an expensive proposition for the organization lagging behind in integrating best practices into its invoice processing. The unfortunate thing is that it isn't a difficult thing to do; it just takes determination, management backing, and a little knowhow. Here's an easy get-in-shape plan. We'll take a look at the cost of ignoring best invoice practices, what those best practices are, and then give you some advice on how to integrate practices not currently in use.

The Cost of Ignoring Best Practices

When invoices are not handled in an efficient, effective manner duplicate payments occur. And, as those reading this are well aware, few vendors return those duplicates. An organization not using good invoice practices can estimate that one-tenth of one percent of invoices will be paid incorrectly, with about half of that being eventually recovered through normal routines. For example, an electric bill paid twice will result in a credit on a future bill. The only cost is the lost investment income on the funds. The remainder will sit hidden away as credits on the vendors' books. Many of these vendors will "forget" to include the credits on your statements, some intentionally hiding them.

Poor practices anywhere in the accounts payable chain opens the door to fraud. This is especially true when it comes to invoices as those inefficient practices allow crooks to sneak through fraudulent invoices. This is money that is rarely recovered.

Perhaps the biggest cost associated with less than stellar invoice practices is the loss of early payment discounts. These discounts are available to those who pay certain invoices within a very short time period, most commonly ten days. They represent a gold mine for the organizations that can manage to get the invoices processed quickly. Vendors realize what a great deal these discounts are and many are aggressively looking for ways to eliminate them. So any organization that doesn't make the invoice processing cut will find their discounts slipping away, or not offered at all.

For some, poor invoice processing has led to charges of weak internal controls. This is never a good thing, but it is a double whammy for those public companies who find themselves zapped in their Sarbanes-Oxley audits.

When invoices are not processed effectively payments are often delayed. This can lead to frayed vendor relationships when payments are delayed and in the extreme, the organization being put on credit hold. That tends to get everyone's attention and creates a brouhaha with purchasing and management. Often, it's not only the vendor relations that get frayed. The relationship between purchasing and accounts payable also suffers as does morale in the accounts payable department itself.

The rest of this article appears in the December issue of Accounts Payable Now & Tomorrow.

As you know, payments to nonresident aliens have to be reported to the IRS. This issue is of special importance to those organizations that frequently hire guest lecturers and consultants from overseas. Unfortunately it is an area that isn't well understood and the IRS is increasing its focus on the reporting (or lack thereof) of these payments. We are especially pleased that Cyrus Daftary, a tax expert specializing in international taxation and regulatory compliance, has agreed to join us on February 11 to share his expertise on this topic with our readers. We'll have additional information about this event in January but if you want to sign up, just use the link below.

We thought we'd include this just in case you missed it last month. The Internal Revenue Service has issued the 2008 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning Jan. 1, 2008, the standard mileage rates for the use of a car will be 50.5 cents per mile for business miles driven.

One of the things that came through loud and clear in your responses to our recent Fraud Survey, the questions at our recent Fraud Webinar, and your notes to me, is that you want more information about detecting and preventing T&E Fraud. So, we've invited a T&E expert to join us on February 26 for a Webinar focusing solely on T&E fraud. This will be one of our regular $159 webinars. However, those who attended our fraud webinar last week or bought the CD from that event will be sent an invitation to attend this session for $99. The invitation with the registration link will be sent out in January. We'll have more details in January, but if you want to sign up, just use the link below.

We have made arrangements for our readers to attend a free Webinar entitled, "Making the Move to Electronic Payments" on February 27. It will be hosted by Bottomline Technologies.

Organizations of all sizes are frequently advised that a leading AP best practice is to move away from paper checks and use electronic means to make payments, including ACH, wire transfers, and p-cards. Although checks are still the dominant method for business-to- business payments, companies are gradually overcoming the behavioral and technical challenges to increase their use of e-payments. This is supported in the 2007 AFP Electronic Payments Survey, just released by the Association for Financial Professionals. The typical company now makes 74% of its B2B payments by check, down from 81% in 2004.

But why is the adoption curve not growing more quickly, and what can your organization do to increase its own use of e-payments and reap all the associated benefits? Watch this space for more information on the free, upcoming Webinar to be offered by Bottomline Technologies that will offer both industry perspective and practical advice on removing the barriers to e-payment adoption for your company. If you would like to register now, Bottomline will follow- up with all the details.

January is my least favorite month of the year. Once my anniversary passes on the 2nd, all I have to look forward to are the holiday bills, taxes (something that never goes well in our household), and cold yucky weather. I'm guessing a lot of you are in the same boat-not to mention the 1099 fun! That's why we decided to offer a puzzle for our readers to help ease them back into the work world after the holidays. It won't make the work go away but hopefully it will make the transition back a little easier. To receive your puzzle on the morning of the 2nd, send an email to publisher@ap-now.com with the words New Year Puzzle in the subject line.

Only Two Left: 1099 Intensive Seminar CDs

We recorded the online 1099 intensive seminar held at the very end of November. And, it's a good thing we did. The lectures were extremely informative but that was only the beginning. The audience asked a ton of questions and the recording contains all the answers to those pointed questions. The session ran just under six hours. So, if you are going to listen to this CD, make sure you put aside a decent amount of time and take copious notes when the questions start.

We've got two CDs left and at this point do not have plans to order more. If you want to order and need to pay by check, drop me a line and we'll reserve a copy for you.

We'd like to say a very special thank you to all our readers for being with us this year. Your readership, notes, thoughts, and participation in our surveys and events help make our publications and events as strong as they are. Even if we can't thank each of you personally please know that your contributions are very much appreciated. I look forward to an even more robust 2008 and wish you the very best both professionally and personally. Until next year, thanks for listening!

Mary Schaeffer & the AP Now staff