This policy and procedure manual outlines the guidelines for efficient and effective Accounts Payable management using the Xero accounting software in our Small to Medium Enterprise (SME) based in Australia. The objective is to ensure accuracy, transparency, and compliance with financial regulations.

II. Accounts Payable Process Overview

A. Invoice Receipt and Verification:

  1. Invoices should be submitted to the designated email address or uploaded directly into Xero.
  2. Accounts payable staff will verify the accuracy of each invoice, matching it with purchase orders and delivery receipts.

B. Approval Process:

  1. Invoices within the approved budget require managerial approval.
  2. Approval should be documented within Xero using the appropriate approval workflow.

C. Data Entry:

  1. Authorised personnel will enter validated invoices into Xero, ensuring accurate details such as invoice number, date, amount, and vendor information.
  2. Coding expenses to the correct account codes and cost centres should be done accurately.

D. Payment Processing:

  1. Payments will be processed by the agreed-upon payment terms.
  2. Regular payment runs will be scheduled, and urgent payments will be processed as needed.
  3. Payment approvals will follow a dual-authorisation process.

E. Vendor Management:

  1. Maintain an up-to-date vendor database in Xero.
  2. Regularly review vendor performance and negotiate favourable payment terms where possible.

III. Xero Software Utilisation

A. User Access:

  1. User roles within Xero will be assigned based on job responsibilities.
  2. Regularly review and update user access to ensure security and compliance.

B. Document Attachments:

  1. All supporting documents (invoices, receipts) should be attached to respective transactions within Xero.
  2. Attachments should be legible and stored systematically.

C. Bank Reconciliation:

  1. Regularly reconcile bank statements in Xero to ensure accuracy in financial records.
  2. Investigate and resolve discrepancies promptly.

IV. Compliance and Reporting

A. Compliance:

  1. Ensure compliance with tax regulations and financial reporting standards.
  2. Conduct periodic audits to verify compliance.

B. Reporting:

  1. Generate regular reports from Xero for management review.
  2. Provide accurate and timely financial information for decision-making.

V. Training and Continuous Improvement

A. Training:

  1. Provide training for new staff on Xero usage and accounts payable procedures.
  2. Conduct periodic refresher training sessions.

B. Continuous Improvement:

  1. Regularly review and update procedures to enhance efficiency.
  2. Encourage feedback from staff to identify areas for improvement.

VI. Security and Data Integrity

A. Data Security:

  1. Implement strong password policies.
  2. Regularly update Xero and other related software.

B. Data Backups:

  1. Regularly backup data in Xero to prevent loss in case of system failures.

VII. Communication and Escalation

A. Communication:

  1. Maintain open communication channels within the accounts payable team and other relevant departments.
  2. Document and communicate any changes in the process promptly.

B. Escalation:

  1. Establish a straightforward escalation process for issues or discrepancies.
  2. Escalate unresolved issues to the appropriate level of management.

VIII. Policy Review and Updates

A. Review:

  1. Conduct periodic reviews of this policy and procedures manual.
  2. Ensure that the policy aligns with the organisation’s goals and objectives.

B. Updates:

  1. Update the manual to reflect process changes, software updates, or regulatory requirements.
  2. Communicate updates to relevant staff.

This policy and procedure manual aims to establish a standardised and efficient process for managing accounts payable using Xero within our SME in Australia. Adherence to these guidelines will contribute to financial accuracy, regulatory compliance, and overall organisational success.