Following improper procedures in paying bills could create problems for daily business management or Internal Revenue Service audits. These few simple suggestions may help you.

• Every check should have some written document to support it an invoice, petty cash voucher, payroll summary or check request will suffice. If such support is not available, write a memo stating what the check is for.
  
• Each of these supporting documents should be signed or initialed by you or someone you have authorized to do so. The signature should indicate that the goods or services have been received, the terms and price are correct, and no error has been made in computing the amount to be paid. When cash discounts are offered, make sure they are computed and deducted correctly.
  
• When each check is written, the supporting document should be marked “Paid” and should include the date and check number. If the checks are prepared for your signature by an employee, you should see the supporting document before you sign the check. If you do not use voucher (multiple copy) checks, it is generally recommended that you purchase a “Paid” stamp, which has an imprint where you may enter the date and check number. This stamp should be used with red ink so paid invoices are easily identified.
  
• After payment has been made, this supporting material should be filed in a paid bills file. The paid bills file should be kept in alphabetical order by payee for each accounting year (fiscal or calendar). Start a new file at the beginning of each calendar or fiscal year.
  
• It is recommended that paid bills be kept for seven years