Accounting Best Practices, Fifth Edition

3–34. Increase the Frequency of Check Runs

The issuance of a manual check involves a great deal of extra work for the accounts payable staff, because they must perform a number of tasks that are normally spread over a much larger number of checks in the typical check run, plus handle the manual logging of the check into the computer system. If they forget to enter the manual check, then even more time is lost during the bank reconciliation process, when the check will appear as an exception, and must be investigated and reconciled.

One way to reduce the number of manual checks is to investigate how many of the checks could have been included in the normal check run if there had been more frequently scheduled check runs. For example, if check runs are performed only on Fridays and a check request appears on Monday, could the person demanding the check wait a few days until a midweek check run, or would he still require an immediate payment? In many cases, adding one or two check runs per week will be more cost-effective than issuing a large quantity of manual checks. The correct solution will vary by company, depending on the volume and nature of each manual check request.

An alternative approach is to shift the date on which check runs are completed, rather than increase their frequency. For example, what if most manual checks are demanded by the sales staff, who return from out-of-state sales trips on Fridays and want to be paid the following Monday? The solution may be shifting ...