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Payables Management #363826

Course Overview

Credit

Amount

CPA

Course Author: Steven M. Bragg, CPA Field of Study (CPA): Accounting

Course Description

Course publication/revision date: This course was updated on 8/27/2026.

The accounts payable function represents one of the greatest opportunities for increasing efficiencies within the accounting department. Payables Management shows the accountant how to set up and run the payables function, including many tips for operational improvements. The course goes further, exploring the accounting for payables transactions, record keeping, measurement systems, unclaimed property reporting, cost recovery activities, use taxes, and more. In short, this course provides the accountant with a complete toolkit of solutions for improving the payables function.

Table of Contents

Chapter 1 - Overview of Payables1

Transaction Cycles	1
Organizational Structure of the Accounting Department	2
Payables Functions	4
Payables Job Descriptions	6

Chapter 2 - Invoice Processing8

The Need for Precise Invoice Processing	8
The Supplier Invoice Processing Procedure (Manual System)	9
The Supplier Invoice Processing Procedure (Integrated System)	13
Accounts Payable Credits Processing Procedure	15
The Evaluated Receipts Processing Procedure	16
The Check Payment Issuance Procedure	18
Payment Alternatives	20
The Void Checks Procedure	20
Enhancements to Invoice Processing	21
Direct Invoice Delivery	21
Centralize E-mailed Invoice Processing	22
Return Incomplete Invoices	22
Invoice Numbering Convention	22
Request Aggregated Invoice	22
Minimize Approvals	22
Analyze Matching Discrepancies	23
Monitor Invoice Disputes	23
Recurring Payment Automation	23
Manual Check Reduction	23
Analyze Manual Checks	24
Restrict Manual Delivery of Checks	24
Restrict Cash Advances	24
Schedule Frequent Check Runs	24
Use a Signature Stamp or Plate	24
Reduce the Need for Second Signatures	25
Encourage use of ACH	25
Clean the Payables Aging Report	25
Search for Open Credits	25
Reduce the Number of Suppliers	26
Final Thoughts	26

Chapter 3 - Types of Payments28

Cash Payments (Petty Cash)	28
Check Payments	30
Foreign Check Clearing	32
Advantages of Checks	33
Disadvantages of Checks	33
Bank Drafts	33
Automated Clearing House Payments	34
Advantages of ACH	35
Same Day ACH	36
Global ACH	36
Wire Transfers	37
The Letter of Credit	39
The Standby Letter of Credit	40

Chapter 4 - Expense Reimbursement42

The Need for Expense Reimbursement	42
The Expense Report Submission Procedure (Manual System)	42
The On-Line Expense Report Submission Procedure	46
Advances in Expense Reporting	47
The Expense Report Review Procedure	47
The Travel and Entertainment Policy	49
Additional Expense Reimbursement Topics	51
Cash Advances	51
Expense Report Auditing	51
Expense Report Outsourcing	52
Spend Management	52
Employee Reviews	53

Chapter 5 - Procurement Cards55

When and How to Use Procurement Cards	55
The Card Reconciliation Procedure	57
The Lost Card Procedure	60
Additional Procurement Card Topics	63
Card Issuer Relations	63
Card Rebates	63
Cash Flow Management	63
Card User Relations	63
Departure of Card Users	64

Chapter 6 - Use Taxes66

Sales and Use Tax Overview	66
Use Tax Systems	67
Additional Use Tax Issues	68
Use Tax Audits	68
Sales Tax Exemption Certificate	69

Chapter 7 - Finance Issues71

Early Payment Discounts	71
Payment Timing	72
Supply Chain Financing	73

Chapter 8 - Accounting for Payables76

Routine Accounts Payable Entries	76
Gross and Net Price Methods	77
Period-end Accounts Payable Entries	78
Applicable Accounts to Charge	78

Chapter 9 - Closing Payables82

Accounts Payable Accruals	82
Expense Reports	83
Issues with the Credit Card Close	83
Accounts Payable Suspense Items	84
Discrepancy Invoices	85
Uncashed Checks	85
Reconciling Accounts Payable	85
Additional Year-end Tasks	86
Closing the Ledger	87

Chapter 10 - Department Management89

Payables Manager Responsibilities	89
Schedule of Activities	89
Error Tracking System	89
Process Reviews	91
Queue Management	91
Department Layout	92
Skills Review and Training	93
Measuring the Results of Training	94
Consolidate Accounting	94
Quality of the Work Environment	95
Flexible Work Hours	95
Job Sharing	95
Permanent Part-Time Work	96
Supplier Relations	96

Chapter 11 - Payables Controls99

Accounts Payable Processing Controls	99
Alternative Accounts Payable Control Systems	103
Control System for Manual Accounts Payable	103
Control System for Computerized Accounts Payable	103
Controls for Supplier Portals	104
Additional Payables Controls – Trend Analysis	104
Additional Payables Controls – Fraud Related	105
Additional Payables Controls – Periodic Actions	106
Expense Report Processing Controls	107
Alternative Expense Report Control Systems	108
Control System for Manual Expense Reporting	108
Control System for Computerized Expense Reporting	108
Additional Expense Report Controls – Fraud Related	108
Additional Expense Report Controls – Periodic Actions	109
In-Process Procurement Card Controls	110
Alternative Procurement Card Control Systems	111
Procurement Card Control System without a Transaction Log	111
Procurement Card Control System with a Transaction Log	111
Additional Payables Controls – Fraud Related	111
Additional Payables Controls – Periodic Actions	112
Petty Cash Controls	113
Additional Payables Controls – Fraud Related	114
Payables Policies	115
Payables Policies	115
Expense Report Policies	116
Procurement Card Policies	116
Petty Cash Policies	116

Chapter 12 - Payables Fraud119

Personal Purchases	119
Refunds of Personal Purchases	119
Fake Suppliers	119
Supplier Overbillings	120
Unauthorized Shipments	120
Supplier-Staff Collusion	120
Authorization Limit Avoidance	120
Petty Cash Theft	120
Redirected Payments	121
Check Fraud	121
Check Theft	121
ACH Debits	121
Keystroke Logging	122
The Need for Controls Reviews	122

Chapter 13 - Payables Technology124

The Payment Factory	124
Automated Expense Report Submissions	125
Automated Payables Matching	125
Supplier Portals	126
Automated W-9 Forms	126

Chapter 14 - Payables Record Keeping129

The Vendor Master File	129
Vendor Master File Usage	130
Supplier Naming Conventions	130
Vendor Master File Errors	131
Duplicate Record Detection and Prevention	132
TIN Matching	133
The Payables Filing System	133
Off-site Storage	134
Document Imaging	134
Document Destruction	135

Chapter 15 - Government Reporting137

The Form 1099-MISC	137
The Form 1099-NEC	140
The Form W-9	142
The Backup Withholding Rule	143
Form 1099 Administrative Issues	143
Form W-9 Administrative Issues	144

Chapter 16 - Unclaimed Property147

The Unclaimed Property Liability	147
Uncashed Checks	148
Treatment of Credits	148
Due Diligence Letters	149
The Dormancy Period	149
The Unclaimed Property Audit	149
Document Retention Policy	150
Filing Unclaimed Property Reports	151
Claiming Unclaimed Property	152

Chapter 17 - Cost Recovery154

Internal Cost Recovery Targets	154
Advertising Expenditures	154
Allowances	154
Contracts	154
Duplicate Payments	155
Freight Billings	155
Health Plan Enrollment	155
Legal Billings	155
Spend Compliance	155
Supplier Credits	156
Telecommunications Billings	156
Unclaimed Property	156
Unreturned Deposits	156
Internal Cost Recovery Staff	156
Recovery Auditors	157
Cost-Benefit of Cost Recovery Activities	158
Cost Recovery Timing	159
Fertile Ground for Cost Recovery Efforts	160

Chapter 18 - Payables Measurements162

Days Payables Outstanding	162
Supplier Billed Price Variance	163
Transaction Error Rate	164
Full-Time Equivalent Measurements	165
FTEs per $1 Million of Revenue	165
Staff Cost per FTE	165
Line Items per FTE	166
Paperless Measurements	166
Percent of Paperless Invoices	166
Percent of Paperless Payments	166
Additional Payables Measurements	167
Answers to Chapter Questions	169

Glossary181

Index183

Course Details

Author: Steven M. Bragg, CPA

Steven Bragg, CPA, has been the chief financial officer or controller of four companies, as well as a consulting manager at Ernst & Young. He received a master’s degree in finance from Bentley College, an MBA from Babson College, and a Bachelor’s degree in Economics from the University of Maine. He has been a two-time president of the Colorado Mountain Club, and is an avid alpine skier, mountain biker, and certified master diver. Mr. Bragg resides in Centennial, Colorado. He has written more than 300 books and courses, including New Controller Guidebook, GAAP Guidebook, and Payroll Management.

Publication/Revision Date: 8/27/2026

Course Exam Questions (online): 50 (multiple-choice)

Program Delivery Method: NASBA QAS Self-Study

Available Formats of Course Text: PDF or PDF plus printed copy sent in the mail

Course Level, Prerequisites, and Advance Preparation Requirements

License	Course Level	Prerequisites	Advance Preparation Requirements
CPA	Basic	None	None

Sponsor ID Numbers

National Registry of CPE Sponsors ID: 107615

State CPA Board Sponsor ID Numbers (where applicable)

Florida Division of Certified Public Accounting: 0004761

Hawaii Board of Public Accountancy: 14003

New York State Board for Public Accountancy: 002146

Ohio Accountancy Board: CPE .51 PSR

Pennsylvania State Board of Accountancy: PX178025

Texas State Board of Public Accountancy: 009349

Learning Objectives

As a result of studying the course material, you should be able to meet the objectives listed below:

Recognize the types of transaction cycles, as well as the effects of the different organizational structures.
Specify the effects of the matching concept and the use of adjustment documents in invoice processing.
Identify the types of payments, their advantages, and when they are used.
Specify the exclusions from expense reports.
Recognize the steps used in the reconciliation of a procurement card statement.
Identify the parties involved in remitting sales and use taxes.
Identify the concepts under which supply chain financing is offered to suppliers.
Specify how accounting software applies information when an invoice is recorded.
Specify how accrued expenses are calculated.
Identify the types of process improvements, as well as the methods used to improve the layout of a department.
Recognize the controls used for invoice processing, recurring payments, expense reports, procurement cards, and petty cash.
Identify the types of fraud that can apply to payables.
Cite the impacts and features of the different types of payables technology.
Identify the fields used in the vendor master file, and the methods used to derive supplier identification numbers.
Specify the uses of the Form 1099 copies.
Identify the fields used in the Form 1099.
Specify the situations in which backup withholding is not required.
Recognize the rules under which unclaimed property is sent to the applicable state government.
Specify the processes related to unclaimed property.
Specify the areas in which cost recovery efforts can yield a significant return.
Cite the situations in which certain payables measurements can yield incorrect or skewed results.