& John German, CPA, CIA | Senior Manager
Critical events test both operational readiness and financial performance. The volume of contractor invoices is often staggering, and paying contractors quickly and accurately can be incredibly challenging.
Having effective processes and ample resources in place is essential to minimizing costs, ensuring compliance, and preserving contractor relationships. We’re sharing some best practices to help your team navigate the chaos.
What Is a Critical Event?
A critical event is any situation that halts operations and demands an urgent, coordinated response. This includes planned shutdowns for maintenance and upgrades as well as unplanned outages due to equipment failures, human error, cyber-attacks, and natural disasters like severe weather events.
Even when expected, these events require agile and well-documented processes to mobilize resources and restore operations as quickly as possible.
During critical events, business owners and Accounts Payable teams often juggle an influx of invoices from new and existing contractors. Stakeholders and trusted contractors all play a role—but there may also be a need to quickly onboard additional support. Without the right systems and processes in place, these events can strain resources, increase risk, and damage relationships.
Critical Event Payment Risks
Under pressure, even the most experienced organizations can face payment challenges that could negatively impact financial performance and potentially disrupt restoration efforts. The most common include:
- Overpayments: Inadvertent costly overpayments can occur for erroneous charges and expenses.
- Lost Reimbursement: For incidents eligible for state, federal, or insurance funding, inadequate documentation can result in missed reimbursements—or trigger costly audits and penalties.
- Contractor Friction: Delayed or unclear payments frustrate contractors, erode trust, and make it harder to mobilize resources for the next event.
These risks have both a short-term operational cost and a long-term impact on an organization’s ability to recover quickly when the next event occurs.
Proactive Planning Pays Off
There’s an old saying: “The best time to plant a tree was 30 years ago. The second best time is today.” The same holds true for critical event payment readiness.
If you don’t have a playbook, we’d encourage you to create one now. If you’re not leveraging technology, such as dashboards updated in real-time to increase visibility for internal stakeholders and contractors, consider enhancements to increase efficiencies. And if you’re unsure whether your records will pass audit and regulatory scrutiny, find out before it’s too late.
The payoff is significant:
- Improved vendor relationships while ensuring timely, accurate payments
- Enhanced alignment across the enterprise
- Stronger compliance and reduced audit risk
- Better resource allocation during and after the event
Together, these outcomes ensure your organization is not just reacting when navigating the chaos of a critical event, but managing it with control, confidence, and long-term resilience.
Keys to Success
Establish A Playbook
A critical event billing and disbursement playbook helps ensure everyone knows what’s expected—before the pressure hits. It should clearly define requirements for:
- Audit checklist: The required steps to validate invoices for payment
- Invoice submission: Where and how are invoices submitted
- Invoice content: What details are required
- Support: What support documentation and/or data is required
- Reimbursable vs non-reimbursable expenses: Which costs will and won’t be reimbursed
- Remediation & escalation workflows: What is the sequence of reviewers and approvers, plus escalation steps when invoices cannot be approved as submitted
Review the Playbook
An effective playbook isn’t static. It evolves, with lessons learned following each critical event.
After an event, your team should be asking themselves what worked well, where things fell short, and what process updates can be put in place to prevent future pain. This ensures your team and contractors can transact efficiently even under the most trying circumstances.
Communicate
Payment readiness is a team effort. Finance, accounts payable, procurement, field operations, compliance, and IT all have a stake in success. Alignment before and during an event means:
- Defining clear roles, responsibilities, and approval flows
- Sharing invoicing requirements with internal and external stakeholders
- Open and ongoing communications across the enterprise
- Real-time dashboard and reporting
When every group understands the requirements of the payment readiness playbook and communicates a consistent message with their contractor points of contact, approvals are faster, errors are reduced, and the organization can focus on restoring operations as quickly as possible.
Real-Time Review
During a critical event, invoices come in fast, and in high volume. The strongest teams have tools and processes to manage that volume—or, they bring on external specialists to help:
- Design, implement, and refine a clear process for reviewing and approving invoices so nothing gets overlooked in the rush.
- Establish documentation requirements that ensure every charge is backed up and audit-ready.
- Create and maintain centralized dashboards and portals that track invoices instantly, flag missing documentation, and show real-time status to both finance teams and contractors.
- Open communication channels with contractors and internal teams to quickly resolve issues and prevent bottlenecks.
Real-World Lessons
When it comes to payment readiness, the difference between barely getting by and operating with confidence is often the right systems and processes.
One of our clients was processing thousands of invoices during a natural disaster event, using only spreadsheets and shared email inboxes. It worked—but the process was slow, unnecessarily expensive, and offered little transparency for their contractors on the status of their invoices.
After engaging SC&H to augment their team and implement a centralized dashboard, invoice processing time dropped significantly. Errors and exceptions were remediated quickly, contractor satisfaction improved, and the accounts payable team regained valuable bandwidth.
In another case, a state audit required detailed proof of reimbursement eligibility. The client navigated the audit seamlessly because they had already implemented effective audit protocols and consistently maintained required documentation. That level of audit readiness doesn’t happen by accident—it’s proactively built long before the audit notification is received from regulatory agencies.
When Is It Time to Ask for Help?
Even well-prepared teams can hit capacity limits during a critical event. Proactively recognizing the risk of these moments ahead of time—and acting quickly when the first signs of resource strains are recognized—can be the difference between staying in control and falling behind.
You might need extra support if you’re:
- Falling behind on payments
- Drowning in invoice volume
- Receiving messages from disgruntled suppliers
- Struggling to approve invoices timely – days as opposed to hours
- Facing repeated audit findings
By engaging external specialists early, you can ensure timely and accurate payments, protect contractor relationships, and keep the focus on restoring operations as opposed to invoice processing issues.
Be Ready When It Counts
Critical events will happen, both planned and unplanned. The question is whether your payment systems and processes are ready. The best time to strengthen your processes and technology is before they’re tested by applying learnings from current and past experiences.
Our Contract Compliance Audit Services team can help you develop and refine a payment readiness playbook to help you effectively manage contractor transactions with confidence. Contact us today to assess your payment readiness and put the right processes and technology in place before you need them.
