Accounts Payable Recovery Audits first came to prominence in the 1990’s. Originally a very manual based labour-intensive project, things have progressed dramatically due to the introduction of specifically designed applications and highly skilled audit professionals.
Whilst still considered a niche industry, the majority of large organisations have been utilising these services for many years, enjoying the cash return benefits but more importantly as a vehicle to analyse and improve the Accounts Payable performance.
It’s happening in the background
By the sheer nature of an Accounts Payable Recovery Audit being a service to recover lost profits, it is not readily publicised. However, it is seen as a best practice by many finance leaders.
Historically only used by the largest organisations
In the past this type of service was only available to the largest organisations, simply because the third-party invoice spend and transactional volumes needed to be high in order for service providers to run viable projects. However, with the development of technology and specialist providers with knowledge of multiple industries this is no longer the case.
Which organisation should consider a recovery audit?
Organisations in all industries and sectors should consider an accounts payable recovery audit. However, organisations meeting the below criteria should consider it a standard best practice:
Annual invoice volumes over 50,000 and/or:
Annual 3rd party spend over £250m
Why consider a 3rd party for the recovery audit project?
Due to the nature of a recovery audit project, it can often be beneficial for the review to be carried out by a 3rd party organisation due to impartiality. When reviewing errors, a 3rd party will have a complete unbiased approach which leads to the best results.
It is also common that internal audit or accounts payable teams simply do not have the resources, expertise, or technology to dedicate to this type of project.
In many case 3rd party recovery audit firms are paid only on a contingency basis on the results of their findings. This makes it a risk-free project.
Whilst still considered a niche industry, the majority of large organisations have been utilising these services for many years, enjoying the cash return benefits but more importantly as a vehicle to analyse and improve the Accounts Payable performance.
It’s happening in the background
By the sheer nature of an Accounts Payable Recovery Audit being a service to recover lost profits, it is not readily publicised. However, it is seen as a best practice by many finance leaders.
Historically only used by the largest organisations
In the past this type of service was only available to the largest organisations, simply because the third-party invoice spend and transactional volumes needed to be high in order for service providers to run viable projects. However, with the development of technology and specialist providers with knowledge of multiple industries this is no longer the case.
Which organisation should consider a recovery audit?
Organisations in all industries and sectors should consider an accounts payable recovery audit. However, organisations meeting the below criteria should consider it a standard best practice:
Annual invoice volumes over 50,000 and/or:
Annual 3rd party spend over £250m
Why consider a 3rd party for the recovery audit project?
Due to the nature of a recovery audit project, it can often be beneficial for the review to be carried out by a 3rd party organisation due to impartiality. When reviewing errors, a 3rd party will have a complete unbiased approach which leads to the best results.
It is also common that internal audit or accounts payable teams simply do not have the resources, expertise, or technology to dedicate to this type of project.
In many case 3rd party recovery audit firms are paid only on a contingency basis on the results of their findings. This makes it a risk-free project.
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