IOFM APS - Accredited Payables Specialist (APS) Certification Exam

TheTax and Regulatory Compliancetopic in the APS Certification Program covers the Streamlined Sales Tax Project (SSTP), initiated to simplify U.S. sales tax compliance across states. The SSTP has achieveda uniform exemption certificate(Item II) to standardize resale and other exemptions andrate and boundary databases(Item III) to provide accurate tax rates and jurisdictional boundaries. However, it has not fullyresolved the origin vs. destination question(Item I), as sourcing rules (origin-based vs. destination-based taxation) remain state-specific.

Item I (Resolved the origin vs. destination question): Not fully accomplished. The SSTP provides guidelines for sourcing, but states still choose between origin-based (tax based on seller’s location) and destination-based (tax based on buyer’s location) rules, creating variability.

Item II (Implemented a uniform exemption certificate): Accomplished. The SSTP developed a uniform Streamlined Sales and Use Tax Exemption Certificate, accepted by member states to simplify compliance.

Item III (Created rate and boundary databases): Accomplished. The SSTP provides centralized databases for tax rates and jurisdictional boundaries, aiding accurate tax calculations.

Option A (I only): Incorrect, as Item I is not fully accomplished.

Option B (I, II, and III): Incorrect, as Item I is not fully accomplished.

Option C (II only): Incorrect, as Item III is also accomplished.

Option D (II and III only): Correct, as Items II and III are key SSTP achievements.

Reference to IOFM APS Documents: The APS e-textbook underTax and Regulatory Compliancestates, “The Streamlined Sales Tax Project has implemented a uniform exemption certificate and created rate and boundary databases to simplify compliance, but origin vs. destination sourcing remains variable across states.” The training video notes, “SSTP’s uniform certificate and tax databases are major achievements, though sourcing rules still differ by state.”

TheVendor Master Filetopic in the IOFM APS Certification Program emphasizes the importance of maintaining an audit trail for changes to the vendor master file (VMF) to ensure transparency, accountability, and fraud prevention. An effective audit trail should recordwho requested the change(to verify authorization),who actually made the change(to track accountability), andthe date the change was made(to establish a timeline), ensuring a complete record for compliance and audits.

Item I (Who requested the change): Essential to verify that the request came from an authorized individual, supporting internal controls and fraud prevention.

Item II (Who actually made the change): Critical to track the individual who modified the VMF, ensuring accountability and traceability.

Item III (The date the change was made): Necessary to document when the change occurred, aiding in audits and fraud investigations.

Option A (I, II, and III): Correct, as all three items are essential components of a VMF audit trail.

Option B (I and II only): Incorrect, as Item III (date) is also essential.

Option C (II and III only): Incorrect, as Item I (requester) is also essential.

Option D (I and III only): Incorrect, as Item II (changer) is also essential.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “An audit trail for VMF changes must include who requested the change, who made the change, and the date of the change to ensure transparency and compliance.” The training video reinforces, “Recording the requester, the person making the change, and the date in the VMF audit trail is critical for fraud prevention and audit readiness.”

For procurement card (P-card) transactions, themerchantis responsible for providing 1099 information to the IRS, as they are the party receiving payment for goods or services. IRS Form 1099-MISC or 1099-NEC is required for certain payments to non-employee vendors (e.g., independent contractors) exceeding $600 annually, and merchants report these payments directly to the IRS when paid via P-card, just as they would for other payment methods.

The web source from Tipalti states: “For P-card transactions, the merchant is responsible for reporting 1099 information to the IRS, as they receive the payment and must comply with tax reporting requirements.” This directly supports Option A. The card issuer (Option B) facilitates thetransaction but does not report 1099s, the card user (Option C) is typically an employee making purchases, and accounts payable (Option D) manages payments but does not report 1099s for P-card transactions.

The IOFM APS Certification Program covers “Tax and Regulatory Compliance,” including IRS reporting requirements like Form 1099. The curriculum’s focus on “peer-tested best practices” aligns with the merchant’s responsibility for 1099 reporting in P-card transactions.

Wire transfers are a secure and immediate payment method typically used for high-value transactions due to their reliability and speed, despite higher transaction fees compared to other methods like ACH. Organizations commonly use wire transfers for high dollar payments, such as large vendor payments, international transactions, or critical one-time payments.

The web source from Corcentric explains: “Wire transfers are often used for high-value payments where speed and security are critical, such as large supplier payments or international transactions.” This aligns with Option B.

Direct deposit of executive pay (A)is typically handled via ACH for regular payroll.

Low dollar bulk payments (C)are more cost-effectively processed via ACH or checks.

Rent or mortgage payments (D)may use wire transfers in some cases but are not the most common use.

The IOFM APS Certification Program covers “Payments,” including payment methods like wire transfers. The curriculum’s focus on “peer-tested best practices” supports the use of wire transfers for high dollar payments due to their security and immediacy.

Reducing the cost of invoice processing involves streamlining workflows and minimizing labor-intensive tasks. Reducing paper handling (e.g., through e-invoicing or digital workflows) and manual data entry (e.g., through optical character recognition or automation) are proven methods to lower costs. Eliminating the approval process entirely (Option I) is not a recommended practice, as it increases the risk of errors and fraud, undermining internal controls.

The web source from NetSuite states: “Automation and digitization can significantly reduce invoice processing costs by minimizing manual data entry and paper-based processes… Technologies like OCR and e-invoicing reduce the need for physical handling and manual input.” The Esker source adds: “Reducing paper handling and manual data entry are key to lowering AP processing costs, as they eliminate time-consuming tasks.” These sources confirm that Options II and III are effective cost-reduction strategies, while Option I is not supported, as approvals are a critical control.

The IOFM APS Certification Program covers “Invoices” and “Technology and Automation,” emphasizing efficient invoice processing. The curriculum’s focus on “peer-tested best practices” includes adopting automation to reduce manual tasks, aligning with Options II and III.

TheVendor Master Filetopic in the APS Certification Program covers vendor setup guidelines, which ensure consistency, accuracy, and compliance when adding new vendors. Guidelines typically include validating requester authority, standardizing data entry, and checking for duplicates.Whether the vendor outsources its order fulfillment processis a procurement or operational concern, not typically part of VMF setup guidelines.

Option A (Validating that the person who requested the new vendor is authorized to doso): Included, to ensure only authorized personnel initiate vendor setups, reducing fraud risk.

Option B (Whether or not the vendor outsources its order fulfillment process): Not typically included, as this relates to vendor operations, not VMF data or setup compliance. Correct answer.

Option C (The conventions for the way letters and abbreviations must be entered): Included, to ensure consistent data formatting (e.g., “Inc.” vs. “Incorporated”) for accurate reporting.

Option D (Verification that the vendor is not already in the system): Included, to prevent duplicate vendor records, which can lead to errors like double payments.

Reference to IOFM APS Documents: The APS e-textbook underVendor Master Filestates, “Vendor setup guidelines include verifying requester authority, standardizing data entry, and checking for duplicates, but operational details like outsourcing fulfillment are handled by Procurement.” The training video notes, “Setup guidelines focus on data integrity and compliance, not vendor business processes like fulfillment.”

ThePaymentstopic in the APS Certification Program includes understanding the types of accounts involved in AP transactions, such as assets, liabilities, and expenses. Fixed assets are long-term, tangible assets used in business operations, such as furniture and fixtures, which are not intended for sale. Accounts receivable and inventory, however, are not fixed assets; they are current assets, as they are expected to be converted to cash within a year.

Item I (Accounts receivable): Accounts receivable represent money owed to the organization by customers for goods or services sold. They are classified ascurrent assets, not fixed assets, because they are short-term and liquid. This item is not a fixed asset.

Item II (Furniture and fixtures): Furniture and fixtures (e.g., desks, chairs, office equipment) are tangible, long-term assets used in business operations. They are classified asfixed assetsbecause they have a useful life exceeding one year and are not intended for sale. This item is a fixed asset.

Item III (Inventory): Inventory consists of goods held for sale or use in production. It is classified as acurrent assetbecause it is expected to be sold or used within a year. This item is not a fixed asset.

Option A (I, II, and III): Incorrect, as only II is a fixed asset; I and III are current assets.

Option B (I and II only): Incorrect, as I (accounts receivable) is not a fixed asset.

Option C (II only): Correct, as furniture and fixtures (II) are the only fixed asset among the options.

Option D (I and III only): Incorrect, as neither I (accounts receivable) nor III (inventory) are fixed assets.

Reference to IOFM APS Documents: The APS e-textbook underPaymentscovers basic accounting principles, including the classification of assets. It defines fixed assets as “tangible assets with a useful life of more than one year, such as furniture, fixtures, and equipment, used in business operations.” The text distinguishes fixed assets from current assets like accounts receivable and inventory, which are “expected to be converted to cash or used within a year.” The training video reinforces this by discussing how AP processes payments for fixed assets (e.g., capital expenditures) versus current assets (e.g., inventory purchases).

Evaluated Receipt Settlement (ERS) is a payment process that eliminates the need for a supplier invoice by triggering payments based on the purchase order (PO) and receiving documents (e.g., goods received note or delivery receipt). The PO establishes the agreed-upon terms, quantities, and prices, while the receipt confirms the actual delivery of goods or services. This allows payments to be processed without an invoice, streamlining the accounts payable process.

The web source from Esker states: “Evaluated Receipt Settlement (ERS) is a procedure for paying suppliers without requiring a paper invoice from the supplier… Payments are triggered by the receipt of goods or services against a purchase order.” The Corcentric source further clarifies: “ERS requires only the purchase order and receiving documents to initiate payment, eliminating the need for an invoice.” This directly supports Option B (PO and Receipt), as these are the two critical documents for ERS. Options A, C, and D are incorrect because they include the invoice, which is not required in ERS.

The IOFM APS Certification Program covers “Payments,” including ERS as an efficient payment method. The curriculum’s focus on “peer-tested best practices for each phase of the payment process” aligns with the industry standard that ERS relies on the PO and receipt.

Automating accounts payable (AP) processes offers several incentives, includingreduced costs of handling paper(Option I) through digital invoicing and workflows, andbetter forecasting(Option II) by providing real-time data for cash flow and spend analysis. However, automation does noteliminate the need for audits(Option III), as audits remain essential for compliance, fraud prevention, and internal controls, even with automated systems.

The web source from Esker states: “AP automation reduces costs associated with paper-based processes, such as printing and mailing, and improves forecasting by providing real-time visibility into financial data.” The Tipalti source adds: “Automation enhances efficiency but does not eliminate audits, which are still required for regulatory compliance.” This supports Options I and II, while ruling out Option III.

The IOFM APS Certification Program covers “Technology and Automation,” emphasizing the benefits of AP automation. The curriculum’s focus on “peer-tested best practices” aligns with cost reduction and improved forecasting as key incentives, while maintaining the necessity of audits.

TheInternal Controlstopic in the APS Certification Program highlights the importance of a sound records management plan for AP processes, particularly for compliance, security, and financialanalysis. A records management plan ensures that documents (e.g., invoices, vendor data) are organized, secure, and accessible, supporting legal protection, information security, and expenditure analysis.

Item I (To afford some protection against lawsuits): A records management plan ensures documentation is available to defend against legal claims, such as vendor disputes or audits, providing evidence of compliance. This is a valid reason.

Item II (To safeguard vital information): Records management protects sensitive data (e.g., vendor TINs, payment details) from loss or unauthorized access, ensuring confidentiality and compliance. This is a valid reason.

Item III (To analyze and manage expenditures): Records management enables AP to track and analyze spending patterns, supporting budgeting and cost control. This is a valid reason.

Option A (III only): Incorrect, as Items I and II are also valid reasons.

Option B (I and II only): Incorrect, as Item III is also a valid reason.

Option C (I, II, and III): Correct, as all three items are reasons for a sound records management plan.

Option D (I only): Incorrect, as Items II and III are also valid reasons.

Reference to IOFM APS Documents: The APS e-textbook underInternal Controlsstates, “A sound records management plan protects against lawsuits by maintaining auditable records, safeguards vital information like vendor data, and enables expenditure analysis for cost management.” The training video discusses records management as a critical control, citing its role in legal compliance, data security, and financial oversight.