If you read about scanning your car deals, you may be looking around the office to see other ways to reduce the weight of paper in your office. There are many documents that we file in a cabinet because it’s right there and then we’re done. What we don’t anticipate is how we will need something from that file next week, next month or next year.

As with many aspects of accounting, accounts payable is cyclical. Every month you cut checks for regular monthly expenses, be it a lease payment on the building, utilities, or even the detail invoices for the hundreds of cars that come through your lot each week. With all of these checks come several vendors to track invoices, payments and year-end 1099-MISC prep.

You write over 100 checks to your vendors each month. Your A/P clerk loves the routine of accounts payable, but does that mean you have to love filing paper and better yet finding it later? Scanning Accounts Payable will allow you free up space in your accounting office, expedite your 1099-MISC prep and track your vendor’s liability insurance.

 

Your office space is limited.

With over 100 checks written each month, you are holding on to a lot of paper. Do you rotate out your filing each year to the long-term storage to make space for next year’s files? By continuing to file your accounts payable checks in physical filing cabinets, you are limited by your office space. With a large accounting office, you might have a year’s worth of checks. But if you are working in a smaller area, it might only be 6 months.

 

Don’t fear the end of the year

1099-MISC tax reporting and maintaining vendor information can be daunting. At the end of the year, 1099-MISC tax reporting is pretty simple. Pull the vendor payment report from your DMS and the 1099-MISC statements are printed right from your desk. We all know nothing is that simple.

Are all of your vendors uniquely identified with their own vendor numbers? Chances are you have several ad hoc checks written over the course of the year. Tracking vendors paid with ad hoc checks is a nightmare. You have trained your A/P clerk to use a vendor number for all payments. What about the exception when your controller needs a check right now for the owner but there are 3 vendors with the same name? Sometimes ad hoc checks happen.

Who do you need to send a 1099-MISC tax form to? Your vendors should be completing a W-9 form prior to payment. This W-9 form contains important information you will be using to prepare the 1099-MISC statements including the legal business name, address, and Federal ID number reported with the IRS. Improperly recording a vendor’s tax information could result in a mix-match report from the IRS.

 

Are your vendors insured?

Who is responsible when the mobile detailer is injured while working at your dealership? Do you have insurance for that? Requiring your vendors to hold liability insurance protects your company as well as theirs. Is the mobile detailer a friend of one of your employees who said he can detail cars but hasn’t registered his business or isn’t holding liability insurance?

By requiring your vendors hold liability insurance, you are requiring your vendors to be more reputable. Request your vendors provide a certificate of liability insurance to you before starting work. Review the certificate for business name, coverage levels and policy expiration date. If you are already doing this, you likely have a tickler file to keep track of the upcoming expiration dates. An insurance policy isn’t worth much if it’s not current.

Upgrade your accounts payable process by scanning accounts payable checks, vendor W-9’s and vendor liability insurance.

 

Reclaim your office space.

On the 10th and 20th, as you finish printing checks and matching invoices, scan your checks into your Accounts Payable cabinet. Once the check is scanned, it is available immediately for recall by the A/P clerk and office manager. After the checks are signed and mailed to your vendors, there is no paperwork to file. When your A/P clerk is on vacation, there is no vendor file to track down. Need to confirm a note written on a check mailed 9 months ago? It’s as simple as opening Scan123 and searching for the vendor. You won’t need to worry about pulling files from the long term storage or someone misfiling the vendor file. It’s all right at your fingertips.

 

Expedite your process.

Scan and store your accounts payable checks in Scan123 to quickly recall check images and invoices as well as reconcile checks against your A/P vendor report for year end. Any ad hoc checks not using a vendor number are quickly identified allowing you to make any corrections in your DMS and finish up your 1099-MISC tax reporting. Have you ever searched for a check copy so you could check notes on an invoice only to spend several minutes walking to the storage location and find that the check or the file itself is not filed correctly or missing altogether? These unnecessary trips are no longer needed when you are storing your accounts payable checks electronically.

Within your Accounts Payable cabinet, create a folder named W-9. Use this folder to store all of your vendor W-9 forms and refer back to it when confirming if the vendor is a sole-proprietor or incorporated, etc. Did you request a W-9 in March but forgot to enter the tax ID in your DMS? Quickly recall the scanned document and enter in the tax information right from your desk.

 

Track your Vendor’s Liability Insurance.

You require your vendors to hold and keep current liability insurance for their business. Scan and store your vendor’s certificates of liability insurance in Scan123 along with their payments. View the certificates to confirm expiration dates and to verify coverage limits. Use the Scan123 Reminders feature (explained below) to create your own virtual tickler file to track the upcoming expiration dates.

 

Who Needs Access to Accounts Payable in Your Dealership?

Once your Scan123 Accounts Payable cabinet is set up, have your Company Admin grant access to the correct people on your team:

  • Office Manager and/or Controller
  • Accounts Payable Clerk

 

Scan123 is DMS-compatible

Scan123 interfaces with your DMS – what does this mean for Accounts Payable?
If you use DealerTrack or Reynolds & Reynolds DMS, Scan123 can help you interface your check information into Scan123. When you scan an accounts payable check and use the check # as the folder name, Scan123 will auto-populate the following search fields, making

  • Vendor Name
  • Vendor Number
  • Check Date
  • Check Amount

 

Utilize Scan123’s Reminders

Follow these simple steps to set reminders for your Vendor’s Liability Insurance

  1. Open your internet browser and login to Scan123
  2. Click on the Accounts Payable cabinet and search for your vendor
  3. Select the folder checkbox next to the vendor name you want to create the reminder for
  4. Click the Calendar icon to the right of the vendor name
  1. Enter the details of your reminder, set the date and time when you would like to receive the reminder and click Save Reminder. You will receive an email at that date and time from Scan123 with your reminder details. You do not need to be logged in to Scan123 for your reminder to generate.

 

Scan your accounts payable today

Create an Accounts Payable cabinet and start scanning your accounts payable checks, vendor W-9’s and liability insurance today.

Do you already have an Accounts Payable cabinet or are currently scanning your Accounts Payable checks? Review these helpful tips to keep your scanning on the right track:

 

Tips For Scanning Accounts Payable

  • Choose a folder naming system that works for your business: File by Vendor Name or Check Number (for DMS interfacing)
  • Organize your accounts payable paperwork as you would if you were storing in paper files: checks and invoices in one scan
  • Review scanned pages for readability before sending to your cabinet
  • Setup your DMS interfacing to get the most out of your Accounts Payable scanning

Want to learn from someone already scanning accounts payable? Comptroller Linda Bain at Pete’s Car Smart Kia uses Scan123 in the accounting office to scan accounts payable. Learn how Scan123 has brought more efficiency to her team.