Virtual Invoices and ACH Vendor Payments

Virtual Invoices and ACH Vendor Payments

The pandemic hit school districts suddenly and forced the closure of buildings. While many operations came to a grinding halt, one thing continued: bills. Having staff come into the district to set up the payables and print the checks became a much more difficult task to accomplish. It has become obvious that changes in the vendor payment process were needed.

One change that many districts have started to embrace is accepting invoices via email. Many districts have set up an accounts payable email address that is accessible only to a few staff responsible for receiving and processing invoices. Setting some guidelines on how those electronic invoices should be formatted is critical. Often, we have heard that vendors do not put the correct purchase information on the invoice, or the invoices are blurry and unreadable. Both can significantly slow down the process for getting the payment processed and cause a lot of stress on the accounts payable staff. To reduce the risk of this occurring, it is best to communicate via a letter to all vendors what the procedures are for submitting invoices. This includes indicating the method for submitting invoices and the required invoice documentation (i.e. invoices should be computer generated and readable, the purchase order number should be referenced, and the detailed information that corresponds to the terms listed in the contract/bid/quote).

Districts are also starting to issue vendor payments via ACH. Some districts we work with have started issuing ACH direct deposits for Medicare Part B reimbursements while others have embarked on issuing payments to all vendors via ACH in efforts to provide vendors with a more timely and efficient method of payment. To implement this payment method, the district would need the vendor’s bank information and would have to ensure the vendor is notified when the transfer is paid. Vendors should also receive an email of the invoices that were paid. And of course, all vendor payments should be reviewed and approved by your district’s claims auditor.

Given that we are still dealing with the virus, the need to reassess current processes and develop ways to work virtually is paramount, not only to ensure the safety of staff, but to ensure business operations are not interrupted.

This article was also featured in our newsletter Lesson Plan Vol. 23

Alyssa Ocello

Alyssa Ocello

Staff Accountant

Alyssa is a member of Cerini & Associates’ audit staff where she works with our education and school district clients. Alyssa has experience in accounting, auditing, and claims auditing. Alyssa’s knowledge and experience allows her to provide specific services including system testing and analysis, as well as claims audit functions.

Garrett Majka

Garrett Majka

Staff Accountant

Garrett is a member of Cerini & Associates’ audit staff where he works with our education and school district clients. He also focuses his efforts on supporting and aiding the Audit Department in day to day obligations. Garrett has experience in accounting, auditing, and claims auditing. Garrett’s knowledge and experience allows him to provide specific services including system testing and analysis, as well as claims audit functions.

Font Resize
Contrast