Writing checks can be turned into an orderly process.
Rather than doing it sporadically when the urge hits, why not make it a weekly process?

One benefit is that it makes it a more orderly process in deciding who will get paid. You’re much less subject to the pressure of who is happening to call on the particular moment. You can take a look at the entire aging, see who is in what position among your suppliers and make more rational decisions.

Another benefit is that it becomes a more efficient process. Rather than picking up and putting it down and picking it up and putting it down the next day and having kind of several interruptions for this during the week, you turn it into one regular weekly process.

Another benefit is that it sets up expectations with your suppliers. They’ll be conditioned to know when your check cutting date is. They’ll know when to expect your checks coming in. This likely conditions them to when they should be making calls to follow-up with you. Hopefully, in the process, you’re going to cut down on the number of vendor calls as well.

So, if you’re not doing accounts payable on a regular basis, such as once a week, consider making the change. Which day of the week? That can depend on personal preference. Normally, I prefer to see it later in the week since often the first part of the week would be devoted to payroll and the very end of the week on Friday might be devoted to finishing up things from the week. The day you pick might also depend on when your check signor might happen to be there.

Now, there can be one exception to this rule. That can be when cash is tight. In those circumstances, you might have the luxury of being able to wait and doing one batch per week. You might have to break it into smaller batches depending upon how much cash you happen to have in the bank.

But, if cash isn’t tight and you’ve got breathing room, then move to a weekly process in cutting checks. You’ll give yourself breathing room on time that can be better used elsewhere.

Jon Paul, MBA, CPA, CMC, CM&AA

President, Value Added Finance Resources
Bringing new insights on results and maximizing company value