To ascertain the profitability of a company’s, an audit is usually done. This can actually give exact figures of the financial standing of the business whether it made a profit or a loss from its last fiscal year of operation. An accounts payable audit is mainly a part of the full accounting audit usually done by large companies to review their disbursement processes. This is mostly requisite by companies that have thousands of suppliers with frequent dealings and a mounting pile of invoices. In this kind of set-up, there is a huge percentage that duplicate payments are made specifically for suppliers that would have plenty transactions. There are several possible causes of doubled payments can be avoided if a company have a recovery audit software installed.
There are company that have several connections. One year’s worth of invoices for them would mean a mounting mountain of paper that has been or needs to be processed so an accounts payable audit process would be an exercise that no one looks forward to doing. Going back to independently check and double check delivery notes against invoices, invoices against payments, invoices against actual inventory can take a lot of effort and can be a very boring task.
Double invoicing or duplicate payments are often accounted for as human error. It is possible that there was doubled invoicing due to a data entry fault in the accounts payable department. Or even a small typographical error can cause the double payment specially when your accounting system was not designed to pinpoint these small faults. It is also possible that there are misallocated payments due to accessible business processes that could have been missed this out. There’s also a compliancy issue when there is an unofficial annual renewals. Another probable cause would be internal and external fraud. These are the typical reason found.
There are several recovery audit softwares available in the market that is capable of pinpointing possible duplicate payments using a search algorithm and sophisticated pattern matching procedure. Once the search is done, a report is generated listing possible duplicate payments in the existing accounting system. With this list, you can verify the data by going back to the physical invoice that is filed in your archives. This mainly cuts down the time of the audit than going straight to the physical file. It will be easier to classify these errors which are eventually recovered through a recovery.
Regular accounts payable audit powered by a recovery audit software benefits companies with the optimised productivity of your accounts payable department. It will also improve effective business processes for a smoother, error-free operations.
Please go to http://www.fiscaltec.com/ for further information about this topic.