If your accounts payable department has never been audited, you probably expect it to be a stressful and disruptive experience. Even the most comprehensive audits, however, don’t have to be painful. With a little prep work and the right team of experts, you should barely notice the audit taking place. Much of the work may not even take place onsite.
Planning
The scope of work is determined during the planning phase of an audit. You will likely receive a checklist to make it simple. Each audit plan is customized according to the needs and operational setup of the client. The following items are useful in structuring the audit:
- An org chart of AP
- Policies and procedures
- Supplier master file
- Workflow documentation
Background
At the start of the actual audit process, AP departments should be prepared for the following to occur:
- Review of prior audit reports
- Review of corrective actions from prior audits
- Interviews with AP staff
- Review of sample invoices
Review
Regardless of the type of review being done (automated, manual or both), access to the following items are critical to finding overpayments and other discrepancies:
- AP history (data files, vendor master file, purchase order files, check copies, etc.)
- Contracts
- Promotional material and advertisements from the vendors
Recovery
Your audit team may support the recovery process by seeking some of all of the following:
- Approval to pursue recoveries
- Claim validation with the vendors
- Follow-up with vendors to ensure recovery
Improvement
The most valuable AP auditors will serve in a consultative capacity, offering guidance on process improvement. They are subject matter experts in accounts payable processing and internal controls. After completing your audit, they will review reports and explain any errors. They may also educate your team about current best practices and any process weaknesses discovered. This can not only help businesses be more efficient, but also lower your
- Final Report
- Value-add reports
- Best practices
With most accounts payable audit firms working on a contingency basis, your biggest risks are inefficiency and the potential for disruption. The most reputable companies, however, will provide a professional, comprehensive review with minimal impact to the daily activities in your organization. What you gain by using a top-notch recovery audit specialist could be considerable recovered funds and expert tips on operational efficiency.