First Line of Defence
Every Accounts Payable team needs to constantly audit its own transactions and processes to ensure they are effective and protect against duplicate payments, fraud and errors. In many cases they don’t have time and rely on third parties to carry out periodically.
In the current economic climate it is essential that Accounts Payable have the tools to implement an effective first line of defence, as prevention is more cost-effective and time efficient than trying to correct mistakes at a later date.
An Account Payable audit measures and tests all aspects of the functioning of an Accounts Payable (AP) department including the “life cycle” of a purchase from procurement, through to invoice receipt, payment and reconciliation. Every part of that cycle offers numerous opportunities for errors to occur, no matter how refined the corporate systems. These errors could include data entry mistakes, duplicate payments, duplicate invoices, duplicate purchase orders, invoices that have been signed off twice, missed discounts, and overlooked pricing agreements.
If you pay more than 5,000 supplier invoices each year, you are almost certainly incurring errors you know nothing about. According to the Institute of Management and Administration, this is a problem that gets proportionately worse as the size of the company increases, regardless of how good its systems are.
FISCAL Technologies partners with a few reputable recovery auditors and believe they do offer a good range of services such as pricing analysis, contract reviews, property audits and utility bill assessment. They should be used historically as the last line of defence.
FISCAL recommends that every Accounts Payable team should be proactive about preventing duplicate payments, fraud and errors by using a combination of specialist in-house accounts payable audit software such as AP Forensics® daily or weekly and an external auditor every year to ensure maximum protection.
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