Email: Telephone: 01798 861189

8 most common filing mistakes that make you look silly

by Anna Koussertari

When it comes to working in accounts payable, knowing the mistakes that can save you and your company money, time and productivity are essential. No one wants to hire a person who will make bad decisions, take too long to pay their vendors, be misinformed on how much they can spend, or worse yet, make their CEO look silly.

Whether you're new to the world of financing or just want to become a better AP professional, having knowledge of the most common filing errors will not only save you time but also money.

1. Filing invoices in numerical order

Filing invoices in numerical order often seems like the obvious solution. After all, when you need to look something up, you can easily find what you're looking for by checking the numbers in your filing cabinet. But, if you are working for a business and are receiving hundreds, even thousands of invoices per month, it becomes much harder to ensure that everything is in order and to keep track of whether or not an invoice has been paid. The more invoices you have to sift through, the more likely it is that you'll make a mistake.

By separating your files into different categories (using alphabetical tabs), you can take some of the pressure off yourself and make searching for specific invoices much simpler. For example, if you're looking for an invoice from ABC Company, instead of having to scan through pages in numerical order until you find it, simply flip over to the tab marked "A" and look there.

2. Using the invoice number as a filing number

This is probably the most common mistake people make when filing their invoices. The invoice number is used for accounting purposes only, so don't use it as a filing number when you're submitting paperwork to the government or other agencies.

You should always use a unique reference number for each invoice that you send out. That way, if there's ever any confusion about which invoice was sent to which customer, it'll be easy to find out from your computer system.

3. Putting initials or scribbles on the invoice when it's filed

When you file an invoice, do not put any marks or initials on it. You may think this is a good way to remember which invoice was filed first or last, but it doesn't look professional and can be confusing for your clients or other employees who might have to look for it in the future.

Furthermore, make sure you do not write "VOID" on it or put any other kind of mark on it that would imply that it has already been paid. This will only confuse whoever is reviewing your invoice and may cause them to reject it as invalid because they think they already paid this amount in previous months or years.

4. Filing a copy with the other copy

If you have multiple copies of a document, don't file all but one copy at once (or vice versa). If one of them gets lost or misplaced, you'll be left without a record of what was filed and when it was filed. Keep one copy in your office until everything is officially filed with the business; then ensure the other copies are distributed to clients and suppliers. That way, if there's ever any confusion about what was filed and when, you'll have proof on hand.

5. Creating too many file folders for one vendor or client

It's tempting to have separate folders for every vendor or client, but this can actually make it harder to find what you're looking for quickly, especially if you have a lot of clients or vendors. Instead, create a single folder for each type of business transaction (i.e., sales receipts) and store them all together in one place (such as a filing cabinet).

When creating folders for a vendor, don't make them too specific. For example, if you're filing a vendor's invoices by date, use something like Jan-Mar or April-June instead of 2017/01 or 2017/04. This makes it easier for other people to find the information they need when they need it most.

6. Not filing for future retrieval

If you don't file your documents in a manner that allows them to be retrieved, then you're going to have a tough time finding them when you need them most. This means not only filing your documents in the right place and with the right labels but also using the appropriate filing system for your needs.

For example, if you're working on a case with multiple parties and multiple issues, then it's best to use a system that allows you to find everything quickly without having to go through every single document in order to find the information that you need.

7. Not using a good filing system to begin with

If you don't have a filing system in place, any attempt to organise will be in vain. We recommend creating separate folders or binders for each type of document and keeping them in a central location where they'll be easy to access. We also suggest taking time at least once every few months to review each folder and make sure all the documents still belong there.

8. Forgetting to mark the ‘payment terms’ on invoices

One simple mistake that could cost you money and confuse HMRC is forgetting to mark payment terms on invoices before sending them out. HMRC requires businesses to report sales transactions by the method of payment. For example, if a customer pays cash for an invoice, then that transaction would be reported as cash sales. If a customer pays by cheque, then that transaction would be reported as cheque sales. Getting this wrong could lead to an audit or penalty notices from the state where your business is registered.

So many accounting professionals are making mistakes when filing invoices for accounts payable, but you can avoid embarrassing yourself by keeping a few simple rules in mind. Get in touch today to learn more through our courses and memberships.


Subscribe to all the latest APA news and information

Request a Call Back

Should you wish a member of the AP team to call you back, please click below.

Call Back