We had talked about query management in one of our previous posts

http://faoblog.com/processes-ap-vendor-management-other-processes2/

Please find below a process map for the same (Click on image for a larger view). 

Last post I covered vendor account reconciliations http://faoblog.com/processes-ap-vendor-management-other-processes3/

Let’s discuss the next topic today:

Payment Settlement

There could be situations, where due to some reason, a disconnect would result in a dead lock. There the process of payment settlement is resorted to.

This could arise out of multiple reasons:

  • Missing / lost supports
  • Unclear terms in the vendor agreements / invoices
  • Unable to fix responsibility for material damage
  • Transporter not honoring his liability
  • Vendor not accepting short shipment
  • Your client rejecting the material on quality issues, which the vendor is not accepting

Quite often, such cases result in a court settlement as well. However, in most situations, it is advised that the vendor and your client discuss the situation and come to some settlement on the amount of payment to be released.

This process is important, and any large company will usually have pre-defined procedures to handle this. There will be some specific authority given to some officials of your client to agree to settlements within specified limits.

So, where do you come into picture? You chip in with all the required ground work to provide specific details and available documentation to help these officials reach logical and calculated decisions.

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