Did you know that in all Accounts Payable processes duplicate or otherwise undue payments will be made? And despite the most advanced systems and clever employees, undue payments go unnoticed, even within the best-in-class AP processes operating at almost 100 percent efficiency. Human errors, misinterpretations of the information presented on the invoice or an incorrect programmed line are always on the loom and causes large amounts of liquidity that flows out of the company. Only in a part of the cases the supplier refunds the amount. As a result, liquidity inadvertently leaks out of the organisation. Due to this complexity a lot of challenges still exist. Experience taught us that an incorrect processed invoice occurs in 1 out of 1000 invoices. When processing an increasing amount of invoices the number of flaws keeps increasing as well and can result in large amounts of missed liquidity. That is where an Accounts Payable (AP) Recovery Audit offers a solution.
How do these undue or duplicate payments originate?
The undue and duplicate payments leads to missed liquidity, leaving companies’ cash flows and working capital under pressure. These payments are often lost in the system and won’t be addressed by the supplier, but how do they originate?
Experience taught us that the following aspects have a large influence on the increasing number of incorrect paid invoices, and even strengthened since the start of the corona pandemic:
- Ignoring system warnings
In some cases an invoice needs to be paid quicker than usual and therefore warnings of the system are ignored to be able to quickly process the payment. This could lead to an increase in the number of undue and duplicate payments.
- Incomplete vendor master data
An important role is assigned to the vendor master data while processing invoices adequately. In case key information regarding payment details is missing, the probability of an incorrect payment to occur is increasing.
- Insufficient amount of time to read the contract details
In today’s rapidly changing economic environment with challenges changing all the time contracts need to be processed as quickly as possible. This could lead to missed discounts on volumes as the speed increases the probability to miss a detail in the contract.
- Remote working
During the corona pandemic, remote working became the new way of working. However, employees had to get used to the new environment and systems were not yet fully in place. This resulted in high pressure on payments to be processed in time, and strengthened with the pressure of suppliers, the number of incorrect payments increased.
What is an AP Recovery Audit with SpendLab?
SpendLab has been helping its clients on a no cure no pay basis with recovering this lost liquidity with minimum time load to our clients. Our service consists of tracing and recovering these undue payments aimed at the past 5 financial years, yielding on average €1,00 per analysed invoice for external spend.
With the focus on both AP-data as well as the data out of the ERP systems, the paid invoices will be analyzed again. With the help of our own developed APRA (Account Payable Recovery Analyzer) platform, consisting of more than 400 algorithms, all retrieved data will be translated to useful information that can be processed by our technology. All the data will be analyzed and after all possible overpayments are addressed our auditing team will have a second view on those flaws.
What does it bring for you?
Our service focuses on several root causes consisting: balance reconciliation, VAT and taxes, open AP, double payments, and overpayments. The data on all aspects are analyzed and the found flaws will be verified and recovered, which results in an improvement of liquidity, but more importantly increasing control, improving the process of the AP department and creating a solid basis for the future. Therefore, we provide you with the SpendLab Analyzer which is characterized by:
- Increase control of your Accounts Payable department
- Optimise future financial vendor planning and behaviour
- Improve the AP process and performance with vendor insights
- Create financial reporting based on verified numbers
- Checked AP data and processes translated to a Risk & Compliance Report
In addition, you will receive a compliance and risk report with insight into the risks and recommendations for process improvements in the Accounts Payable.
Do you feel you also encounter liquidities leaking out of your organization? We are happy to answer all your questions!
Interested in what we could mean for your organization? Feel free to contact us directly or fill in our contact form