My new book, Fraud in Accounts Payable: How to Prevent It, has just been published. One of the most interesting features - at least to me - is the 50 or so short stories. These are fraud tales shared by readers - incidents they have run into during their careers. I couldn’t have made this stuff up if I tried. Here’s one that is while amusing also demonstrates how important it is to have smart employees who queston anything that doesn’t look quite right.

An employee decided to modify a receipt to show a higher dollar amount than had actually been spent. Since the employee couldn’t line up the numbers correctly, he or she used typewriter eraser tape and correction fluid to enter a new dollar amount. The receipts were scanned and e-mailed in. A really alert processor noticed a few minor odd-looking dashes on the scanned receipt and requested the original. Here comes what one of the professionals hearing this story dubbed “that special kind of stupid”: the employee sent the original receipt— with all the correction fluid and tape— into the processor.

Fraud in Accounts Payable: How to Prevent It can be ordered from online booksellers, through your local bookstores or from the publisher via the Wiley link at the bottom of http://www.ap-now.com/links.html  

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© 2008 Mary S. Schaeffer

I was talking to Tracey Reid the other day about unclaimed property and she shared a startling statistic - one that should be of interest to professionals concerned about accounts payable and duplicate payments.

As you may know, Reid is an expert in unclaimed property matters. She believes that roughly 65% of the dollars turned over to the state are either duplicate payments or other monies that will never be returned to their rightful owners because estimating was used to arrive at the amounts.

While there is nothing wrong with estimating when records are not available or too cumbersome, the result is something not intended by the original laws. Since monies turned over to the states as a result of an estimating process are not identified with a particular owner, they can never be returned. Hence they sit in the state coffers forever.

This could be avoided by proper due diligence along the way. Reid will discuss proper due diligence in the webinar/audio conference she’s giving for Accounts Payable Now & Tomorrow on October 7th as well as at our Unclaimed Property seminars in Cincinatti and Los Angeles.

You can find information about these seminars at http://ap-now.com/UPseminar.html; information about all Accounts Payable Now & Tomorrow webinars at http://ap-now.com/webinar.html and information about CDs from past events at http://ap-now.com/apcds.html 

As I start to put together the material on the handling of paper invoices, I realize just how much accounts payable procedures are changing. Just a few short years ago, paying off a faxed invoice was a major league no-no. Paying only from an original invoice was considered a Best Practice.

Today, with the advent of inexpensive technology, you can have many ‘original invoices’ - and they all look good. So, that old chestnut no longer holds water.

Thanks to a question posed by a reader we’re examining the practices related to how invoices are received today and expect to have a White Paper available on this topic shortly.

I can only imagine what AP will look like ten years from now! If you’d like to share your thoughts on that issue, please write me at marys@ap-now.com or post your thoughts here. Registration is required to keep spam off the site.

© 2008 Mary Schaeffer and Accounts Payable Now & Tomorrow

Don’t let your assets disappear, says INGDicrect. The financial institutio is alerting all consumers to the issues surrounding Unclaimed Property and offering advice so the consumers property will not be considered abandoned by the states. What’s more it wants you to write a letter to your legislators to ” make them aware of how a law that was intended to protect consumers is doing just the opposite”

While this may be good news for consumers, it is not for the states - who will ultimately be forced to become even more aggressive in their pursuit of unclaimed property. Well - okay - not all the states will become more aggressive just the ones that rely heavily on that income.

Accounts Payable Now & Tomorrow has help for its readers grappling with Unclaimed Property issues. For information about its Unclaimed Property Toolkits, Seminars or webinars visit ap-now.com

The question of whether or not to include accounts payable job listings in our free weekly ezine, e-AP News (sign up at http://ap-now.com/ezinesignup.html) is one that has been hotly debated here. My colleagues point out that most organizations save that content for paid subscribers. And, while I can see the logic in that from a business point of view, I also know that at the very point where someone needs to find a new job - perhaps because they’ve been laid off or are not getting along with management- is the time when funds are not likely to be available.

I won this battle and we will include a few job listings each week in our weekly ezine, along with my analysis of trends observed from reading the help wanted ads. As I think about it, this is the first time I ever got paid to read the help wanted ads … hmmm … is someone trying to tell me something??? Okay, I’m digressing and will get back to the point - or at least try to.

I also feel that in a tight economy we should do everything we can to keep as many of our readers employed as we can - and all we con do is bring them information. Which is why I am to read the ads and try and determine trends and identify skills in demand in the marketplace.

We also welcome readers to send any accounts payable job openings they may have and we’ll include them as we can. Send them to publisher@ap-now.com

Click here to sign up for e-AP New, the free weekly ezine focusing on accounts payable issues.

© 2008 Mary S. Schaeffer, Accounts Payable Now & Tomorrow, a CRYSTALLUS, Inc. publication

I had a note from a colleague who had a client who was using a p-card hoping to not have to issue 1099s for those payments. My pal didn’t think this was quite kosher so he dropped me a line. Alas, my friend was correct. At least at this poit in time, use of a p-card does not relieve an organization from having to issue 1099s.

Here’s how I explained it: He may be paying AMEX in a lump sum each month, but from his bill he knows how much he paid each vendor – and if those vendors would have gotten a 1099 if paid by check, then he still owes the 1099 at year end. There was talk about the credit card companies taking on this responsibility – but to date that has not happened.

 Not only that but he should marry his p-card data with check data to determine if he needs to issue the 1099. For example, if he paid someone $400 with p-cards and $300 with checks, individually he would not have to issue the 1099 – but combined it is over the $600 threshold and a 1099 would be due. The IRS does not care how the payment was made – just that it was.

Wish I could bring you better news.

© 2008 Mary Schaeffer, CRYSTALLUS, Inc. and Accounts Payable Now & Tomorrow

We recently watched the Dateline segment focused on Unclaimed Property. It’s not often than an accounts payable issue makes it into prime time television - not to mention being hosted by a former member of the NY Giants football team. So, I watched the show, You Might Be Rich, with great anticipation and, to be honest some trepidation.

As might be expected, the focus was on the consumers who were having money returned to them rather than companies who remit (or at least are supposed to remit) the funds and other Unclaimed Property. The show very cleverly interspersed some facts about Unclaimed Property throughout the show, educating the audience while entertaining them with the stories.

While the stories pursued by Tiki’s team showed that some real detective work was needed to locate some of the rightful owners, it also tweaked the states sensibilities by returning money, albiet smaller dollar amounts, to the likes of Joan Rivers and Hulk Hogan.  It is not clear, at least to me, whether this show will become a regular staple of the primetime lineup - and we are investigating to uncover that story. As soon as we figure it out, we’ll post it somewhere on this blog.

We wondered what, if any fallout there would be from the show. Clearly it has raised the public’s awareness of this issue - and probably sent thousands looking for their own unclaimed property. The show provided the www.missingmoney.com website and has included it on Dateline’s own site. This could be a serious blow to those states that rely on income from Unclaimed Property - which Dateline estimates at $30 billion.

Luckily, or perhaps unluckily depending on your point of view, the show did not focus on the relatively low rate of compliance with Unclaimed Property laws. I understand why this was not part of the show - it was meant to entertain the public not educate corporate titans who really should know better.

If this show makes an impact and people start claiming thier unclaimed property in large numbers the states will be forced to increase the number of audits and many organizations who have ignored this issue will have no choice but to address it - with state auditors breathing down their necks. Even worse than having the state auditor on their doorstep (yes, there is a more distressing prospect!) you could end up with a third party auditor working on behalf of the state. Since these auditors are generally paid on a contingency basis they have no interest in researching items to determine if they really should be turned over to the state or may be an exception - say a duplicate payment.

In case you can’t guess, this is an issue I am passionate about. I am very concerned that some of my readers will get caught in an audit. Better to get your Unclaimed Property house in order on your own, before the auditors show up. That’s why Accounts Payable Now & Tomorrow has scheduled several webinars and seminars focused on Unclaimed Property and have a number of Unclaimed Property products to help with this issue. We don’t want anyone to get caught out of compliance.

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© 2008 Mary S. Schaeffer, CRYSTALLUS, Inc. and Accounts Payable Now & Tomorrow

First off, as most everyone who works in accounts payable knows, it is a BEST PRACTICE to get a W-9 from every new vendor you do business with. Do not take their word that they are a corporation and you don’t need one (for that may not be true within the next few years). Additionally, and more to the point, they might not be a corporation (even if it says so in their name) and your organization could be on the hook for their taxes not paid, along with penalties for inaccurate reporting. 

Yes, let me reiterate before I start talking about the TIN Matching Program, that within the next few years it is very likely that a W-9 will have to be issued for ALL payments made for services.

Once you get the coveted W-9 (ideally before the first payment is released to the vendor), you can check that the information on the W-9 is correct by verifying it using the IRS’ TIN Matching Program. Everyone should sign up and use it. Those who do report something like a 98% drop in the number of B-Notices they receive each year. Imagine having to deal with 2 B-Notices instead of 100. Not only that, it helps flush out fraudulent vendors who were bold enough to supply a falsified W-9 in the first place. Note: Just requiring a W-9 is enough to scare off a high percentage of the crooks.

So, given the obvious benefit of using this FREE service, why hasn’t everyone signed up? The problem comes with a misconception about the sign up process. Before using the service, the IRS requires a high level organization executive with the authority to bind the organization to sign the organization up for the program. Once the sign up is complete (and none of that information is ever seen by anyone at the organization again), the day-to-day operation of the Matching Program can be turned over to someone in accounts payable.

So, what’s the problem. The IRS wants to make sure that the person signing the company up is who he or she says they are. In order to do this, the IRS requires a little personal information - namely the person’s social security number and their AGI from their last tax return. Now keep in mind, you are not giving the IRS this information - THEY ALREADY HAVE IT. It is just being used by the IRS to verify that the person signing the company is who they say they are.

The tax return number appears to be the problem. Despite be assured that this information can never be accessed by anyone once the application is completed, some CFOs and Controllers drag their feet. This is unfortunate because the service is excellent and companies are being held back by what amounts to an old wives tale. In fact, in some organizations, the accounts payable manager fills in as much of the application as possible and then leaves the room while the sensitive tax information is entered.

In a few organizations this responsibility is delegated in writing to the accounts payable manager by the CFO or the Controller.

Use of the IRS TIN Matching Program is a best practice advocated by all who are interested in running an efficient accounts payable operation. Don’t let the imaginary concern regarding your tax information stand in the way of your organization using what is probably one of the finest developments to come out of the IRS in a very long time.

Want to learn how to use the TIN Matching Program? You can read all the information on the IRS website OR you can listen to the AP Now CD on Using the TIN Matching Program.

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© 2008 Mary Schaeffer

The July issue of Accounts Payable Now & Tomorrow contains an article about what to do when management dumps employees on accounts payable. This happens either because the employee is not performing well in another department or because the person in question is a relative or friend of a high level executive or Board of Diretor member.

As promised, this piece contains my real life experiences when presented with such a situation many years ago. At the time I was one of several mid-level managers at a large insurance company. I was asked to take a young man to lunch and interview him. He had recently graduated from college. I should have been suspicious. Whenever I was given the “opportunity” to go to lunch at a nice restaurant when one of my bosses could have gone there was usually a catch.

And, as I was to find out, this time was no exception. During our rather uneventful lunch the young man confided his long term career goals. He wanted to work for our company for two years and then we had taught him everything he needed to know about Treasury, he wanted to go work in a different, more glamorous industry. I saw stars. Hint to young job seekers: No company wants to train you for another firm. So, even if this is your real goal, keep it to yourself.

When I got back from lunch my boss asked me what I thought. I was rather emphatic that we not be the training ground for some other company. I thought he agreed - so imagine my surprise a week later when he informed me we had hired the young man. I was outraged. He then shared something he had not told me earlier. The rest of the management team within the department shared my opinion - but it did not matter. Someone on the Board of Directors wanted us to hire him - and the interviews were just a formality. Whether we wanted him or not, he was now part of our staff.

Needless to say, this did not sit well - but what are you going to do? This is a story with a surprise ending. The young man turned out to be quite nice, he worked hard and did his best to fit in - and I ended up leaving the company before he did.

I’m not naive. I know that most tales of people being dumped into departments that do not want them do not end as this one did. However, I am a firm believer that if you give most people a chance, they will work and you can ‘make lemonade out of lemons.’

Also, for the record, this was the second time this department had the dubious pleasure of such a hire - and the first time, it was such an unmitigated disaster the department was finally given permission to terminate the employment of the person in question - and in fact, we used to tell, “remember when so-and-so did ….” stories.

Mary Schaeffer

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© 2008 All rights reserved. Mary Schaeffer and Accounts Payable Now & Tomorrow, a CRYSTALLUS, Inc. publication

The recent announcement that the state of Delaware was decreasing the dormancy period for certain types of securiites from five years to three years is supposed to make a nice contribution to the Delaware budget.

To be perfectly honest about this, I really didn’t think it would make much of a difference - that it just represented one more way the states were nickeling and diming everywhere they could to get a few more dollars into the state coffers. Then I saw the numbers for what looked like a minor change in the unclaimed property rules for a small state, albiet one that gets quite a bit of income from unclaimed property.

Some experts estimate that this one small change is supposed to add $90 million to Delaware’s bottom line. Given the state of the economy, it is no wonder Delaware made this change - and I suspect at least a few other states will follow suit.

Resources from AP Now to help you with your Unclaimed Property Issues:

Upcoming webinars (CDs also available):

1) on July 22 Unclaimed Property: How to Get in Compliance If You’ve Never Filed
2) on September 25 Avoid the Ten Most Common Unclaimed Property ‘Gotchas’

Upcoming seminars:
1) On September 26, an all day UP Intensive Best Practice seminar in Los Angeles at the Beverly Hills Marriot Residence Inn and

2) On October 3 another all day UP Intensive Best Practice seminar in Cinncinatti at the Cincinnati Marriott at RiverCenter

For details about either seminar, go to  http://ap-now.com/UPseminar.html

Unclaimed Property Toolkits and Products

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