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<B>Fall 2004</B>
<p>
<P>Welcome to the fall issue of <FONT color=#333366><B><I>Profit Search
eNews</FONT></B></I>. We are very pleased to bring you interesting
commentary and news on A/P matters from Profit Search Inc., an accounts
payable audit firm in Massachusetts, online at <A
href="http://www.profitsearchinc.com/"><FONT
color=#0000ff>www.profitsearchinc.com</FONT></A>.
<P>If you know someone who might enjoy receiving <FONT
color=#333366><B><I>Profit Search eNews</FONT></B></I>, please let us
know by <A href="mailto:[email protected]"><FONT
color=#333366><B>clicking here</FONT></B></A> and we will send him/her
an introductory copy.
<P>In this issue, we feature the following:
<UL><FONT color=#333366><B>
<LI><A
href="#News">Industry
News</A> - Check 21
<LI>
<P style="MARGIN-TOP: 4px"><A
href="#Fraud">NE
IAPP Meeting Content</A> - Automated invoice/T&E processing</P>
<LI>
<P style="MARGIN-TOP: 4px"><A
href="#Money">Sarbanes-Oxley</A>
- Internal controls</P>
<LI>
<P style="MARGIN-TOP: 5px"><A
href="#Unclaimed">Unclaimed
Property</A> - opportunities for personal
benefit</P></LI></UL></B></FONT></FONT>
<P style="MARGIN-TOP: 25px; MARGIN-BOTTOM: 0px"><B><FONT
face="Verdana, Arial, Helvetica, sans-serif" color=#cc3300><A
name=News>Industry News</A> </FONT></B>
<P style="MARGIN-TOP: 12px"><B><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>Check Clearing for
the 21st Century Act ("Check 21") </FONT></B>
<P style="MARGIN-TOP: 12px"><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>The check clearing
landscape is changing. Banks want to reduce the number of paper
checks in the system and they want to clear checks faster to reduce
float. You may have noticed in the past year a number of your
personal checks being cleared as electronic items rather than paper
checks. Me too. And it causes me a headache when reconciling
my bank account.</FONT>
<P style="MARGIN-TOP: 12px"><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>As of October 28
2004, the effective date of Check 21, banks don't have to return your
original checks but can provide a "substitute check" (image copy)
instead. See the press release from the Federal Reserve at: <FONT
color=#0000ff><U><A
href="http://www.federalreserve.gov/boarddocs/press/other/2004/20041028/Default.htm"><FONT
color=#0000ff>www.federalreserve.gov/boarddocs/press/other/2004/20041028/Default.htm</FONT></A></U></FONT></FONT>
<P style="MARGIN-TOP: 12px"><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>For an excellent
discussion of questions and answers about Check 21 by Consumer's Union,
go to: <A
href="http://www.consumersunion.org/finance/ckclear1002.htm"><FONT
color=#0000ff>www.consumersunion.org/finance/ckclear1002.htm</FONT></A></FONT>
<P style="MARGIN-TOP: 12px"><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>Don't confuse Check
21 with <U>electronic check conversion</U>. This occurs when an
electronic payment is created from the information on your check.
You may have experienced this when paying by check in a store, but any
vendor can convert a check. For instance, both my mortgage company
and credit card company now process check payments electronically.
I don't remember authorizing them to do this, but I probably missed a
notice they sent. For more information about electronic check
conversion go to: <A
href="http://www.federalreserve.gov/pubs/checkconv/default.htm#differ"><FONT
color=#0000ff>www.federalreserve.gov/pubs/checkconv/default.htm#differ</FONT></A>
<P><FONT color=#333366><B>P.S. Insight:</B></FONT> Expect the checks you
write to clear faster. Make sure you have enough money in the bank
to cover the checks you write!
<P><B>P.S. Insight:</B> Check 21 has negative implications for
fraud control. It will be harder to prove fraud, not having an
original check available to review. If you're interested in the
fraud aspects of Check 21, go <A href="http://www.unisys.com/eprise/main/admin/corporate/doc/Is_Your_Check_21_Implementation_a_Fraud_Hazard.pdf">here</a>
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<U><FONT color=#0000ff><A href="http://www.unisys.com/eprise/main/admin/corporate/doc/Is_Your_Check_21_Implementation_a_Fraud_Hazard.pdf">
www.unisys.com/eprise/main/admin/corporate/doc/Is_Your_Check_21_Implementation_a_Fraud_Hazard.pdf
</A></FONT></U>
-->
for a white paper from Unisys.</FONT><FONT
face="Verdana, Arial, Helvetica, sans-serif">
<P style="MARGIN-TOP: 25px"><A name=Fraud><B><FONT
face="Verdana, Arial, Helvetica, sans-serif"
color=#cc3300>IAPP</FONT></B></A></FONT><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2><B><FONT
face="Verdana, Arial, Helvetica, sans-serif" color=#cc3300>
</FONT></B><FONT face=Verdana size=2>
<P class=MsoNormal><B>Recent NE IAPP Chapter Meetings</B></P>
<P class=MsoNormal>If you missed the last two (June and October)
meetings in Sturbridge, MA, too bad! The next meeting will be in
February in the Boston area. Please make an attempt to attend
these meetings where you can share information with your peers.
Here are two excerpts from the prior sessions:</P></FONT>
<UL style="MARGIN-TOP: 0in; MARGIN-BOTTOM: 0in" type=disc>
<LI class=MsoNormal><FONT face=Verdana size=2>Mike Anzalone of
<B>Concur Technologies</B>, (<FONT color=#0000ff><A
href="http://www.concur.com/">http://www.concur.com/</A></FONT>) a
global leader in expense management, presented their web-based
automated solution to <U>Expense Management (T&E)
Processing</U>. There are huge potential savings from:</FONT>
</LI></UL><FONT face=Verdana size=2>
<P class=MsoNormal
style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
- less time handling papers (fewer manual entries)</P>
<P class=MsoNormal
style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
- vendor management gains (consolidating vendors, better pricing)</P>
<P class=MsoNormal
style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
- less abuse of company policies (built-in compliance; prohibit certain
behaviors)</P>
<P class=MsoNormal
style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
- spend information and analysis </P>
<P class=MsoNormal
style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
- reduced need to audit paperwork</P>
<P class=MsoNormal
style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
- better VAT reclaim</P>
<P class=MsoNormal>This presentation was followed an open discussion of
T&E policies and processing at member companies and what challenges
members are facing in this area.</P>
<UL>
<LI>
<P class=MsoNormal>Craig Clark and Ozlem Yilmaz of <B>BasWare,
Inc.</B> (<A href="http://www.basware.com/"><FONT
color=#0000ff>www.basware.com</FONT></A>) presented their company's
integrated <U>Invoice Automation Software</U>. Invoice
automation provides for paperless approvals, improved document
tracking, information and statistical reporting and better cash
management. It will reduce processing errors, increase revenues
(discounts) and enable better access to invoices. </P></LI></UL>
<P class=MsoNormal>Craig walked us through several sample entries using
the program interface. </P></FONT>
<P><FONT color=#333366><B>P.S. Insight:</B></FONT> These are two of the
many vendors with many software programs to manage your invoice
processing and automation needs. Make sure you evaluate your needs
and what the vendors have to offer before you make a commitment!<FONT
face=Verdana size=2></FONT>
</FONT><P style="MARGIN-TOP: 25px"><B><FONT
face="Verdana, Arial, Helvetica, sans-serif" color=#cc3300><A
name=Money>Sarbanes-Oxley</A></FONT><FONT
face="Verdana, Arial, Helvetica, sans-serif" color=#333366 size=2>
<P style="MARGIN-TOP: 12px">Internal controls in the accounts payable
department</B></FONT><FONT face="Verdana, Arial, Helvetica, sans-serif"
size=2>
<P class=MsoNormal><SPAN style="FONT-FAMILY: Verdana">The Sarbanes-Oxley
Act (SarbOx) requires the CEO and CFO of a public company to certify
that its internal accounting procedures are designed to prevent
financial misstatements or misuse of company assets (cash).
Although SarbOx applies only to public companies, the internal control
requirements are worthwhile for any organization that wants to operate
under best practices.</SPAN></P>
<P class=MsoNormal><SPAN style="FONT-FAMILY: Verdana">Many of you have
been involved with (or the target of!) review projects to outline and
evaluate the internal systems in the accounts payable area. It may
be painful but it is a valuable opportunity to understand and update
routines which have broken down over time and to ensure proper policies
in your areas. Proper controls will safeguard assets, ensure
efficiencies and prevent losses. </SPAN></P>
<P class=MsoNormal><SPAN style="FONT-FAMILY: Verdana">Here are some key
aspects of internal controls in the accounts payable area:</SPAN></P>
<UL>
<LI>
<P class=MsoNormal style="MARGIN-BOTTOM: 6px"><SPAN
style="FONT-FAMILY: Verdana"><U>Policies and Procedures</U>.
Establish adequate policies and procedures for a/p processing
routines. Review the different policies from time to time in
your staff meetings.</SPAN></P>
<LI>
<P class=MsoNormal style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 6px"><SPAN
style="FONT-FAMILY: Verdana"><U>Training</U>. Ensure proper
training of staff. Train new staff until you are confident they know
the proper procedures. Hold occasional meetings to review
important areas and to talk about problems and issues.</SPAN></P>
<LI>
<P class=MsoNormal style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 6px"><SPAN
style="FONT-FAMILY: Verdana"><U>Approval Authorities</U>.<BR>Require
approvals to set up a vendor<BR>Organize access rights to accounts
payable records (review individual access rights
periodically)<BR>Establish appropriate authority levels to approve
invoices</SPAN></P>
<LI>
<P class=MsoNormal style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 6px"><SPAN
style="FONT-FAMILY: Verdana"><U>Segregation of duties</U>. No
one person should have control over assets and access to accounting
records (no one should control the entire financial
transaction)</SPAN></P>
<LI>
<P class=MsoNormal style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 6px"><SPAN
style="FONT-FAMILY: Verdana"><U>Safeguard assets</U>.<BR>Restrict
access to blank checks<BR>Use prenumbered and fraud-resistant check
stock<BR>Review vouchers and match and review before releasing
checks<BR>Ensure proper check signature procedures<BR>Use positive
pay</SPAN></P></LI></UL></FONT><FONT face=Verdana color=#cc3300>
<P style="MARGIN-TOP: 10px"><B><A name=Unclaimed>Unclaimed
Property</A></B></FONT><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>
<P class=MsoNormal><SPAN style="FONT-FAMILY: Verdana">Organizations are
required to make annual payments for abandoned property state
governments. Annual payments are generally required by November
1<SUP>st</SUP>. Did you make your annual payment this month?
There are stiff fines and interest penalties, in addition to the
property amounts, for failure to comply.</SPAN></P>
<P class=MsoNormal><SPAN style="FONT-FAMILY: Verdana">Dont forget that
you, personally, may be a beneficiary. In particular, unclaimed
money from recent demutualization of insurance companies (in particular
MetLife Inc. and John Hancock Financial Services Inc.) is now available
at state treasurers offices. Here are the state links for you to
check for your own unclaimed property:</SPAN></P>
<UL>
<LI>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 5px"><SPAN
style="FONT-FAMILY: Verdana">Connecticut - </SPAN></FONT><FONT
face=Verdana size=2><A
style="COLOR: #0000ff; FONT-FAMILY: Verdana; TEXT-DECORATION: underline; text-underline: single"
href="http://www.nameitandclaimit.org/">http://www.nameitandclaimit.org/</A></P></FONT><FONT
face="Verdana, Arial, Helvetica, sans-serif" size=2>
<LI>
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 5px"><SPAN
style="FONT-FAMILY: Verdana">Maine, New Hampshire - <A
href="http://www.missingmoney.com/"><FONT
color=#0000ff>www.missingmoney.com</FONT></A></SPAN></P>
<LI>
<P class=MsoNormal style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 5px"><SPAN
style="FONT-FAMILY: Verdana">Massachusetts - <FONT color=#0000ff><A
href="http://abpweb.tre.state.ma.us/abp/frmNewSrch.aspx"><FONT
color=#0000ff>abpweb.tre.state.ma.us/abp/frmNewSrch.aspx</FONT></A></FONT></SPAN></P>
<LI>
<P class=MsoNormal style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 5px"><SPAN
style="FONT-FAMILY: Verdana">Rhode Island - <FONT color=#0000ff><A
href="http://www.treasury.ri.gov/unclaimed.htm"><FONT
color=#0000ff>www.treasury.ri.gov/unclaimed.htm</FONT></A></FONT></SPAN></P></LI></UL>
<P><B>P.S. Insight:</B> Don't forget to check for unclaimed
property for your company or organization!
<P style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px">
<P>We hope you enjoyed this issue of <FONT color=#333366><B><I>Profit
Search eNews</B></FONT></I> and found something here that you can put to
good use in your job. We know that sometimes it is difficult to stay
current on A/P issues, and that is why we bring you <FONT
color=#333366><B><I>Profit Search eNews.</B></FONT></I>
<P> </P>
<P><FONT color=#333366><B>Doug Costello, CA MBA
CAPP</B></FONT><BR>President<BR>Profit Search Inc.</P>
<P><FONT color=#333366><B>P.S.</B></FONT> Got questions, comments, or
ideas for us? Email us at: <A
href="mailto:[email protected]">[email protected]</A> or
call (508) 875-1815 -- Thanks! </P>
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