Managing the Accounts Payable Department

You are in charge of the accounts payable department of a medium-sized company in the Seattle area. You have three accounts payable personnel reporting to you. Your department processes about 1,000 invoices per month and processes checks twice a week, on Tuesday and Friday. Until a year ago, you were proud of the way things were running your three subordinates are experienced, reliable, and dedicated. Rarely did you ever receive vendor complaints. Errors were few and far between and when they did occur, you would get your staff together to brainstorm corrective actions in an effort to prevent future occurrences.

You report to the Controller (Smith) who in turn reports to the VP of Finance (Jones). Jones is relatively new to the company and came highly recommended from another firm about a year ago. Jones golfs every week with the President of the company and they also take a lot of out-of-town trips together. Jones also has a legendary reputation for firing people who get in his way although that is not confirmed. The head of the accounts receivable department left under mysterious circumstances and rumor has it that he and Jones did not get along. Shortly after he arrived, he swept in and made several changes in your accounts payable operations that, in your opinion, were unnecessary and have proven to disrupt the smooth operations of your department. For example, within a month of his arrival, he instituted a process whereby he or Smith must review and approve all checks before they are mailed (remember, there are 1,000 invoices per month).

Sometimes this additional review and approval step adds several days to the process, especially when Jones is traveling or otherwise busy. Once in a while, he delegates the function to Smith, but not often. As a result of this extra step, some of the payments have been late and vendors are now complaining that your company took early payment discounts for which it was not entitled. Another frustrating thing about the new process is that sometimes, Jones will insist on delivering some of the checks personally; stating that he is going to be visiting that vendor anyway and he might as well save the company the cost of a postage stamp. But the most frustrating thing of all is that at least twice a month, Mr. Jones comes and demands a rush check stating that the paperwork will eventually catch-up. Of course, no one on your overworked staff ever follows up to verify a 3 way matches for the rush checks were actually performed. The last time you handed him a rush check, he mentioned that you were due for a significant pay raise.

On several occasions, you tried to broach your concerns with Smith but he seemed disinterested and even somewhat hostile when you brought the subject up. On your last visit to his office, he became agitated, telling you to go complain to Jones yourself. You happened to also notice, peeking at his computer screen, that Smith was editing his resume. One day while Googling for information on Jones, you came across a notification that a civil case in which Jones was involved was settled out of court. There were no other details given.

Instructions

• Develop a written plan on how to address your frustrations. As part of your plan, include comments on how you will respond to angry customers.
• Develop a plan/procedure for dealing with unmatched invoices (those where Jones demanded a rush check (unmatched invoices are those that have not had the three-way match performed).