How often should companies review their accounts payable policies?

Companies should review their accounts payable policies at least annually or when significant changes occur to ensure they remain relevant and effective in meeting the organization's needs. Regular reviews help to identify any issues or inefficiencies in the current processes, allowing for necessary adjustments that can improve the overall management of payables.

By assessing policies on a yearly basis, companies can respond to potential changes in regulations, technology, or business operations that may impact their accounts payable processes. For instance, new laws could require updates to compliance measures, or the adoption of advanced software might necessitate adjustments to existing procedures.

Waiting to review policies only when issues arise can lead to reactive rather than proactive management, potentially resulting in avoidable inefficiencies or compliance risks. Reviewing every quarter or month could lead to unnecessary workload and could detract from more strategic initiatives if there are no significant changes. Thus, the suggested frequency combines a balance of oversight and operational efficiency.