Why should my company conduct an accounts payable recovery audit? We already have great controls, people and systems. Because no system or individuals operating within your procure-to-payment cycle are 100% error free. The opportunity to circumvent established controls exists in every ERP and legacy system. Communication between suppliers, procurement, receiving and accounts payable is effective most of the time, but not all of the time. While your systems are designed for the efficient payment of invoices, in an environment with a large volume of transactions, a small percentage of leakage inevitably occurs. These dollars can add up to a significant amount and represents pure lost profit.
So what does an accounts payable recovery audit entail, and what are the costs? It really is a simple and painless process. The best part is that it is 100% contingency fee based, which means there is no cost until you actually receive economic benefit for any realized recovery. The review is a backward look at historical supplier spend utilizing a comprehensive audit process and proprietary software, and thus does not
interfere with your day-to-day activities. The involvement of client staff is minimal and data collection is a simple dump of certain files. No special programming is required. Supplier communication, chargeback creation and collection are handled by Strategic Audit Solutions.
What should I expect from an audit? The audit will identify and recapture lost profits due to errors within your procure-to-payment environment. On average, recoveries can range from .05% to .1% of revenue, or $500 thousand to $1 million for firms with $1 billion in revenue. Additionally, the review will identify systemic or procedural weaknesses and make recommendations for business process improvements.
So what’s the catch? There really is none. The engagement is 100% contingency fee based and requires minimal time to support the review. It is a collaborative effort that maintains confidentiality of sensitive information and respect for your supplier relationships. Some believe the true benefit of the engagement is the professional management report that is delivered at the conclusion of the review, which includes details of the findings, audit opportunities and recommendations on how to avoid future leakage. An accounts payable recovery audit is a recommended best practice for most major companies.
Bob Carlino, CEO, along with his partner Jeff Katz, COO, are the co-founders of Strategic Audit Solutions and have an extensive background in auditing retail and non-retail clients with a combined 45 years in this industry. They have had direct and managerial experience with over 50% of the top 100 companies including Wal-Mart, JC Penney, Tyco, Rite Aid, News Corporation and Barnes & Noble. Bob played a major role in building recovery auditing into the prominent industry it is today. With more than 25 years of experience in Accounts Payable recovery auditing, he is a recognized leader and innovator, with a unique range of expertise spanning both client and audit firm perspectives. His passion for the business was the driving force in creating SAS, bringing his large-firm expertise to organizations of all sizes.