So I think we all know by now that the best practice is to not do a rush check to begin with. But when the sudden emergency pops up and the need is there what can we do? Even worse, what can be done when it becomes a common practice to ask for rush checks? Here are three tactics that would work to stop these bad habits:
1. Charge a fee to process a rush check.
This signals that rushed checks are costly to the Accounts Payable department and the price will now be charged to the requestor. Doing this also adds a hurdle to a process that was probably too easy (that is why they keep requesting checks at the last minute because it is so easy).
2. Create a form and approval process.
Accounts Payable can only process a rushed check request if the "Rushed Check Request" form is filled-out and signed by a manager. This again adds additional hurdles (finding the form, filling it out, and getting a manager to sign it). This step also brings the bad habit to the attention of management, which may have been unaware. In turn, increasing management awareness can reduce the risk of fraud.
3. The employee should pay with a company credit card and then add to an expense report.
This gives the employee an alternative to a rush check, that will be easier than filling out forms, getting approval, and paying a fee. Typically, the more steps added to a process, the least likely someone will want to go through with it. The reverse it true, If you want more participation in a process, you need to streamline it (and reduce unnecessary steps, or remove the hurdles).
Which of these steps sounds like the best idea? What other ideas have you heard being used to reduce rush checks?
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In my A/P department, we enforced all three methods. However, the most effective one was charging the fee to the requesting department. Most times the "rush" wasn't exactly urgent, which meant the check could wait to be processed during the normal check run schedule.ReplyDelete
That is true! Sometimes "Rush" is really not a rush.Delete
What is a reasonable fee to charge?ReplyDelete
$15 to $25 is reasonable, compared to the trouble that rushed checks cause.Delete
I agree with point 2 and 3. Making management aware of regular rush checks reduce the frequency.Flashing monthly rush check report to management should also help. For point 3. If employee credit card claims are settled on time, they feel confident to use it, rather than asking for rush checks..ReplyDelete
I would definitely rule out the third option for a few reasons.ReplyDelete
1 the risk of duplication - the credit card payment could be processed as well as the normal AP invoice / purchase order / payment and for the vast majority of systems it will not appear as duplicate payment to supplier, especially if the cost is coded to GL in a different manner
2 laziness of the card holder - rather than going through proper approval channels for payments, the purchase goes through and then becomes a liability to the company or card holder, for an item that may not be within policy or from a preferred supplier.
3 long term review of costs by supplier - if items are purchased on a card, then the refund ids to the card or claimant and not to the supplier, as such it is significantly harder to trace purchase trends, for negotiation of better contracts or to simply find " who did we use last year for this"