This article is to discuss to what extent Accounts Payable departments are able to perform AP Audit processes. We would be interested to hear your comments.
Accounts Payable have enough on their plate with the day-to-day activities required to process invoices through to payment. Accounts Payable has varying degrees of automation and controls for each step of the process; from getting invoices into the system, data-checking, matching and query resolution. However, even with the best people, systems and processes in place; erroneous transactions and duplicates can slip through the net, documents can be missed and AP are none the wiser.
So how do you ensure the Accounts Payable process is 100% complete and accurate?
Most Accounts Payable departments do not have the time, resources or tools to audit every AP transaction. Some Accounts Payable departments do an AP Audit on the Top-X suppliers on a monthly, quarterly, bi-annual or annual basis. This is largely a manual AP Audit process whereby the supplier’s statement is reconciled (this process is called supplier statement reconciliation) to ensure no documents have been missed and supplier balances are accurate for financial reporting. All Accounts Payable departments do ad-hoc statement reconciliations if there are aged items whilst others do no reconciliations at all. Whilst organisations aspire to be able to reconcile all supplier accounts; very few are able to achieve this, simply due to the time constraints.
Some larger organisations use AP Audit providers to analyse their data and identify duplicate payments, missing credit notes and potential fraud. AP Audit providers will also recover the money for you and take a cut of c30% for providing the service.
Having worked with Accounts Payable departments for many years; we’ve come up with a list of key requirements as far as AP Audit capability is concerned and this is the information our customers have told they would like:
At a more granular level, these are some of the capabilities customers often cite as important:
I welcome any comments from Accounts Payable professionals as to what extent you are able to perform AP Audit processes in your organisation.
Book a live demo to see the end-to-end processes on live customers systems and learn how easy it is to try this for free on a Proof of Concept.
Book a Live Demo to see the end-to-end processes on live customers systems and learn how easy it is to try this for free on a Proof of Concept.