Accounting Best Practices, Fifth Edition

3–3. Use Negative Assurance for Invoice Approvals

One of the most significant problems for the accounts payable staff is the continuing delay in receiving approvals of supplier invoices from authorized employees throughout the company. Invoices tend to sit on employee desks as low-priority items, resulting in constant reminders by the accounting staff to turn in documents, as well as late payments and missed early-payment discounts.

This universal problem can be avoided through the use of negative assurance. Under this approval system, invoice copies are sent to authorizing employees, and are automatically paid when due unless the employees tell the accounts payable staff not to issue payment. By focusing only on those invoices that may be incorrect, the accounting staff can process the vast majority of all submitted invoices without cajoling anyone to submit an approved document.

The process can be streamlined even further by digitizing an incoming invoice and e-mailing it to the authorizing employee. By doing so, employees can be reached even when they are off-site, as long as they check their e-mail on a regular basis. By linking these transmissions to workflow software, the accounting staff can designate how long an invoice can wait in a recipient’s e-mail box before it is automatically routed to another authorized person, thereby ensuring that someone will see every invoice ...