Managing Cash Flow

Compiling the Data 189
1. Organizational Issues
a. How is this function organized? Hierarchical, Vertical, Integrated, etc.
Provide an organization chart showing positions and personnel.
b. To whom does each activity within the function report to? Title and
name.
c. Who manages each activity? Title and name.
d. How many employees are included in each activity?
e. What are the major accounts payable policies? (e.g., dollar limit for
accounts payable). Provide documented policies and procedures.
f. What are the total budget and actual allocations for this function?
g. Do you have a functional job description for each position? Provide a
copy of each one.
2. Accounts Payable Processing
a. On what basis and what percentage of total payments do you pay
vendors?
• Pre-pay at time of order
• Payment upon receipt
• Payment with invoice/receipt within discount terms
• Payment with invoice/receipt within 30 days
• Do not take discount
• Take discount anyway (beyond discount period, e.g., 10 days)
b. How often do you process payables for payment?
c. Do you make any exceptions between payment periods?
d. Do you provide for offline manual vendor payments?
e. On average, what is the amount of new payables at any time? Number
of payments? Total dollars?
f. Is accounts payable processing part of an integrated computer
system?
g. What is the amount of annual payments? Number of payments? Total
dollars?
3. Open Payables Control
a. Are open payables part of an integrated computer system?
b. How often do you process payments?
c. Is there a policy to take vendor discounts? Within/at the discount period?
Regardless of the discount period?
d. On average, what is the amount of open payables? Number of vendor
invoices? Total dollars?
e. Are open payables accessible on an on-line basis? Only accessible by
accounts payable personnel? By others? (describe)
Exhibit 6.4
Sample Cash Management Analysis Survey Form—the Accounts Payable
Function