Time Saving Tip for Filing Vendor Invoices

See Also:
Accounts Payable Turnover
Accounts Receivable
Accounts Receivable Turnover
Chart of Accounts (COA)
Problems in Chart of Accounts Design

Current Practice

How do you file your paid vendor invoices? Alphabetically? Who taught you to do it that way? Have you ever wondered why?

How often do you go back and research a paid accounts payable invoice? How much time does it take?

Have you ever thought that there might be a better way?

History

Filing vendor invoices alphabetically has been a practice since before the time of computers. With accounting theory in existence for centuries it is safe to say that the practice has been in place for some time. In a manual environment, it is useful to be able to research invoices, especially if there is a lot of volume involved. But is it necessary in today’s computer environment to manually sort data?

Best Practice for Filing Vendor Invoices

By using the computer to sort for information, you no longer need to do so manually. Once a vendor invoice has been paid you should then file it in check number sequence or by date. This practice will save both the time to prepare the file folders, sort the paid invoices and the filing of those invoices. Additional benefits include not having to use as much supplies nor take as much space to store.’

Arguments Against

The most common argument against this best practice (other than that’s not the way we have been doing it!) is that we need to be able to go back to the original invoice. There might be certain situations such as construction job costing that would require you to review previous bids. However, most often this objection can be countered by recording the required information in the computer, negating the need to go to the source document. In fact, as more companies adopt scanning of original source documents the ability to use a manual filing system will go away.

Conclusion

If you have not re-engineered your filing practices for paid vendor invoices then you are not realizing all of the time savings efficiencies of the computer. In fact, your system is a hybrid manual and computer system. Instead of designing your accounting system around the computer, you take the computer and wrapped it around your manual system!

filing vendor invoices

, , , , ,

One Response to Time Saving Tip for Filing Vendor Invoices

  1. Marie July 14, 2018 at 6:58 am #

    not sure if this filing system will be time saving for company
    that does not SCAN invoices or backup to invoices.?

    If you need to pull all UNSCANNED invoices and back for all payments made
    to same vendor for the year you now have to look up what each check batch run
    the various payments was made on and pull from multiple filed check batches
    vs pulling from one vendor file.

    I like the idea of less filing work up from front
    but wondering if this can come back to haunt you
    when you need to do all the pulling of original UNSCANNED invoices and back up
    for one vendor at a later time throughout the year or year end.

    In an unscanned system where you have to pull paid invoices/backup often
    you can no longer just go to the one vendor folder to pull and lookup
    you have to look up each check number on computer and go pull from multiple check batch locations

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.