07/13/2020 | News release | Distributed by Public on 07/13/2020 03:04
Large companies pay thousands - even millions - of invoices every month. But accounts payable teams still struggle with the volumes they have to process. That leads to errors, and revenue leakage due to unrecognized rebates, incorrect pricing, duplicate invoices and other mistakes.
Of course this is a known issue, and companies routinely bring in outside experts to audit and recover funds lost due to invoicing errors. Traditional recovery audit providers, however, aren't incentivized to help build better processes.
Too many treat audits as standalone projects. That's why modern digital businesses need to look beyond clawbacks - stopping the leak instead of chasing the drips.
Here's one example of how PRGX was able to help a global technology company improve its internal processes and recoup millions.
A recovery audit success story
Challenge: The client, a large technology company with global operations, used the services of a recovery audit firm for years, but wasn't seeing the level of detail needed to identify weaknesses in the process and implement controls that could stop leakage from happening in the future.
The Approach: PRGX was asked to provide a scope of service that included an extensive statement audit as well as an accounts payable transaction review. Ultimately, we aimed to secure recoveries while providing the client with an enterprise-wide view of where the opportunities were to close control gaps and to take corrective action.
The results: PRGX was able to analyze audit results and suggest measures to close gaps in contract compliance, minimizing the risk for overpayments in the future, bringing a deeper level of analysis to the audit process ultimately translated into USD $17 million in recovered funds.
Why was the engagement so successful?
Crucial to success was increasing the breadth of the audit itself, moving from one division to a comprehensive audit of all the client's business units.
The original scope focused on one of the client's general expense divisions, leaving several other business units un-audited, and missing cross entity duplicates and pricing inconsistency.
Expanding the analysis from one unit to another and taking on a broader scope-of-work can be challenging. Still, by taking a partnership approach, PRGX was able to overcome the inherent challenges of an enterprise review.
Because a level of trust and collaboration between PRGX and the client was established, the client saw that PRGX was there to make things better and to partner with them for long-term improvements.
Flexibility is vital in any recovery audit engagement. One business may be ready to do a full recovery audit of the entire company. Another might prefer to start in one area and then incrementally increase the scope. In some cases a phased approach may more manageable, moving the audit in sequence from one division to the next.
In this case, the client's size and multi-country footprint were potential barriers to success. But PRGX's global footprint meant we could deliver the audit in every operating jurisdiction.
The result was an additional USD $10 million in recoveries for the EMEA region alone.
Using recovery audits to future-proof accounts payable
With so many moving parts in your business, it may well be impossible for every cost negotiated upfront to be accurately reflected in back-end payment process.
By using the latest technology tools, complex tasks like supplier solicitation, collection of accounts receivable data, credit discovery, identifying duplicates, and even securing supplier agreement on recoveries all become simpler.
What to know more?
Download our e-book A Playbook for Successful Recovery Audits.