Writing Control Procedures Part 3 | AccountingWEB

Writing Control Procedures Part 3

By Dave Burt, CPA -
Ok, where are we? Oh, yeah, the owner gave me the job of writing control procedures. The first thing I did was load a bunch of templates that I ordered online from Copedia. To get an idea, here are the main headings for the account payable procedures:

Accounts Payable Procedures
General Accounts Payable Guidelines
Segregation of Duties
Approval Authority
Disbursement Approval Procedure
Expense Types
Interim - Manual Checks
Existing Vendors
New Vendors
Setting up and maintaining Vendors in the Computer
Receipt of Invoices
Matching Purchase Orders with Invoices
Subcontract Pay Requests
Employee Expense Reimbursement
Entertainment Reimbursement
Non-Employee Expense Reimbursement
Coding and Entering Invoices

Here is an except for the section Matching Purchase Orders with Invoices:

Matching Purchase Orders with Invoices

Payment of invoices authorized by a company purchase order will require an original vendor invoice, and delivery slip (if applicable).
The accounts payable specialist will compare the invoiced price, quantity, and terms to the ordered price, quantity, and terms in order to identify discrepancies.
The Accounts Payable specialist may approve Price discrepancies of $10.00 or less. Price discrepancies of $11.00 to $100.00 over the purchase order total require approval of the purchasing manager. A Price discrepancy greater than $100.00 requires the generation of a Discrepancy Form and that must be approved by the department and the Controller. All quantity discrepancies require the generation of a discrepancy form. Any discrepancy that involves loss of discount or additional payment of funds will require generation of a discrepancy form.

This template gives you a more or less traditional approach to this process keeping in mind best practices. You can customize it to agree with your practice. If you don’t, but do want to use purchase orders, it gives you the basics of the process.

I went through the temples and picked out and modified each template that either directly controlled assets such as bank deposits, petty cash, etc., or indirectly: customer master files, vendor master files, etc.

Here is an example of one I completed:

DATE ISSUED: 10/08/2008
PURPOSE: The purpose of these procedures is to provide guidance in the use of Company credit cards.
1. Company credit cards are only to be used for purchases made on behalf of the Company, or to pay travel and entertainment expenses incurred on behalf of the Company and authorized under Company policy. (See: Procedures for Reimbursement of Business Related Expenses, Section E-1)
2. Only Cardholders are authorized to use Company credit cards, and the right to use company credit cards should generally not be delegated.
3. Cardholders are responsible for all use of their Company credit cards.
4. All purchases and charges using a Company credit card must comply with all company purchasing, purchase order, travel, and accounts payable policies and procedures. Charges for meals, hotels, transportation, and the like must be supported by an approved Monthly Expense Report in Excel format submitted by the Cardholder. (See: MONTHLY EXPENSE REPORT FORM NO. E101)
5. Company credit cards should never be used to obtain cash advances, except in case of an emergency.
6. Company credit cards should not be used for personal purchases or for identification.
7. Cardholders are responsible for retaining the documentation necessary for proof of purchase. This includes the invoice, shipping documents, and "Customer Copy" of the charge receipt.
8. Cardholders should review all items and flag any item on their portion of the monthly credit card statement that is not reported on their Monthly Expense Report(s) and, if there is a discrepancy, said statement should be returned to Corporate Accounting.
9. Any listed expense which is not covered in the Monthly Expense Report requires a written explanation, which should include the vendor's name, date, description of purchase, business purpose, and reason support is missing.
10. Returns are the responsibility of the Cardholder and should be noted on the Company credit card statement.
11. Disputes must also be noted on the Company credit card statement and supported by any documentation supporting the Cardholder's position.

The links lead either to forms or menu shots that helps the reader to follow the process. Many of the templates were ignored completely if our current process was too different. However, the format was the same for each procedure.

This blog

by Dave Burt, CPA - Dave has held accounting management positions in both public accounting and private industry for such companies as Coldwell Banker and Maytag.

More from this blog

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.


Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.


Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.


Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".


William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.


Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (www.ubcc.com), a software development firm of high-volume, high-productivity accounting and payroll technology.


Eva Rosenberg, MBA, EA, is the publisher of TaxMama.com, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.


Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.


The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.


FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.


Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.


Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of Yellowbook-CPE.com a website devoted to training for governmental auditors.


AccountingWEB is more than just a U.S. team of journalists and financial and technology experts - we have an international side, too! Members of our British team who publish AccountingWEB.co.uk share their ideas, insights, and perspectives from across the pond.