Most small and medium-sized companies deal with a wide range of customers, suppliers and employees. What this means is that many thousands of transactions could be happening every month, with money coming in and going out as invoices are paid and obligations met. Each one of those is a source of potential error, which is why an accounts payable audit can show up some surprising results. There are more than a dozen different kinds of overpayment or mistaken payment than can happen, one of the most common of which are duplicate payments – put simply, when an invoice is paid twice. This, and other types of overpayment, can occur through accident or fraud. If an audit turns up a significant amount of expenditure due to these unnecessary payments – as it almost certainly will – then recovery audit software enables you to regain the lost money.
It is only natural that mistakes will occur with such a complex and wide-ranging accounting system. Human error explains a lot of it: assuming that your payments are processed manually, your accounts team can easily process an invoice twice, or make other mistakes. This is practically unavoidable. Even if it could be addressed, you are not responsible for the invoices sent by your suppliers. They may not be as scrupulous, and some may even be dishonest, realising that they can slip errors past your accounts department that work in their favour.
This may seem like an unusual occurrence, but the fact is that the average SME could be processing thousands of payments or more every single month. Even if a small proportion of these are problematic, the result is cumulative and can be significant. Remember, turnover is not the same as profit. Some estimates suggest that between 0.1 and 0.5 percent of turnover is lost due to duplicate payments and other mistakes. If your company is already struggling then this could make all the difference between sinking and swimming. That’s where the accounts payable audit comes in, locating all of those instances in which overpayments have been made, this month and in the past. Then recovery audit software allows you to chase up those suppliers and other parties who have received more than their due from you. In most cases the explanation will simply be that it was a mistake. In a small minority, though, it could be down to fraud, in which case you may want to take legal action, or at least cease doing business with them.
Please visit https://www.fiscaltec.com/