Dual Approvals for Accounts Payable in Microsoft Dynamics GP

Improve AP Security in your ERP System

Security is crucial at every point of the accounts payable (AP) process. From entering invoices into your ERP solution to approving, generating, and sending payments, proper controls are necessary. You'll need segregation of duties and adequate oversight to protect against fraud. Approvals for accounts payable invoices and payments must be considered carefully.

When you automate your payment processing, you may wonder if you need a dual approval process. In other words, should you institute an approval workflow for both invoices and payments?

For most businesses, there are good reasons to require approvals at both stages of the accounts payable process and segregate those duties.

The Invoice Approval Process and your ERP System

Most companies ensure their invoices are approved before entering them into their ERP. For some, this may be done manually or with Document Management software.

An invoice approval process will help you do the following:

Match POs to invoices

Items purchased and received must match items invoiced for in every aspect, quantity, quality, etc. You can do this by comparing the invoice with the original Purchase Order. This approval will prevent invoices from being entered for payment before an order is completed.

Manage vendors

Vendors must be properly vetted. You must ensure that your suppliers are not on the Office of Foreign Assets Control (OFAC) do-not-do-business-with list. Failure to verify your vendors could result in significant penalties for your company. Your accounting team can also check for duplicate vendors or other inaccuracies. Paying attention to these guidelines will facilitate your vendors being paid accurately and on time.

Prevent fraud

Separation of duties is critical to effective internal control. Because no single person is responsible for every aspect of a transaction, there is a reduced risk of erroneous and inappropriate actions. One or more authorized team members will review and verify that the data is correct. Approvers may be appointed based on the department involved or the issuer of the PO. When separation of duties is impossible in a small business, your accounting software must have compensating controls.

The Payment Approval Process

Payment approval workflows can also happen without paper pushing and manual work. Automated software that integrates with your ERP solution makes the process flow seamlessly.

Do you need a payment approval process if you already have an invoice approval system? If an invoice was already verified and approved, why ask for more approvals?

A payment approval process will help you do the following:

Manage cash

Newer or smaller companies, or those with temporary restraints, might need to be extra careful about cash flow. You may need to establish that sufficient funds are available for payment. Just because the order went through a PO process and funds were authorized doesn't mean things couldn't have changed. Approvers are often controllers, executives, or others who can see the whole financial picture.

Review discounts and payment terms

A payment review process allows you to review payment terms and negotiated discounts. Then you can maximize your payment strategy.

Defend against fraud 

Approvers must verify that payments match invoice data. Mistakes can happen, but so can attempts to subvert funds to fraudulent vendors. Keeping invoice and payment approvals separate, each with different authorizers ensures the segregation of duties.

At Mekorma, we know that invoice and payment approvals provide distinct layers of oversight that complement and reinforce proper controls. More eyes on your end-to-end AP flow can catch and correct various errors and opportunities.

Add security and control to the AP process with Mekorma's add-on solutions for Microsoft Dynamics GP

It's essential to measure the success of your accounts payable operations as part of your digital transformation efforts. Microsoft Dynamics GP ERP solutions offer rich capabilities for Accounts Payable processing. With Mekorma add-on solutions, you can streamline your entire Accounts Payable lifecycle - from invoice entry to vendor payments.

Doing business today requires perseverance, adaptability, and foresight; our team strives to embody these qualities to provide best-in-class solutions for our partners and end-users.

If you are ready to master AP automation with a simple, streamlined Accounts Payable process, contact our experts at Mekorma.

By Mekorma,mekorma.com

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