In this episode, we discuss how to make a standard email address for the payables department work properly.
Overview of the Payables Email Address
This is about having suppliers send all of their communications, and especially their invoices, to payables@ the name of your company. Such as email@example.com. This is one of the basic best practices for the payables department, because it creates a direct avenue between your suppliers and accounting. Otherwise, suppliers might mail invoices to the various department managers, which means that invoices can get lost in some manager’s “in” box, and you don’t find out until a supplier calls up, wondering when you’re going to pay them.
Implementing a Payables Email Address
Though it’s an obvious best practice, it can be helpful to understand the ways in which it might not work, just so you can be prepared for it. The largest issue is with notifying suppliers. You’ll have to conduct a notification campaign for all existing suppliers, so that they’ll change the default email address in their system to the payables address. Some will make the change, and some of them won’t. For the latter group, you’ll need to keep badgering them for as long as it takes.
You’ll also need a notification process for all new suppliers, which means that you include instructions in the notification packet that goes out to these suppliers when they first do business with the company. The problem is for random new suppliers who aren’t selected through any formal procurement process. Instead, a department manager just places an order with them without telling the purchasing department, and the next thing you know, the new supplier is sending invoices to that manager – which will call for a pointed phone call once the payables department realizes what’s happened.
There can also be a problem with the managers who are used to receiving communications directly from suppliers – because now they won’t be. If anyone raises a fuss, I suggest kicking the matter upstairs to the controller, who has more power to force the managers to switch to the new method. This will chew up some time, but if you really want a consistently applied communications channel for invoices, then you have to do the work.
Another issue is who gets to monitor this email address. Because if one person is designated to do it and then goes on vacation, you may not log any invoices into the system until that person gets back. This calls for a procedure to make sure that the account gets accessed at least once a day. And, if the intent is to do more than just receive invoices through this account and also address supplier problems, then the access frequency probably needs to increase to something like once an hour.
Responding to suppliers quickly is not a minor issue – because if they think you’re not monitoring this email address, they’ll go right back to sending invoices to their favorite department manager. So be sure to stay on top of it.
And just to make really sure you’re learning about any problems with the email account, post a phone number on the accounting department’s website for complaints, and make sure you monitor it.
Direct Invoice Entry
Of course, if you have a more advanced accounting system, you can require suppliers to enter their invoices directly into your accounting system through a web page. Instead of having them send invoices to an email address. Direct entry is fairly time-consuming for them, especially for big, multi-line invoices, but on the other hand, the system should send them a notification that their invoices have been received and accepted, which pretty much eliminates the risk of their not being paid.