To err is human, even for humans who work in the accounts division. Sooner or later, someone is going to make a mistake paying an invoice, and it will cost you. That’s obvious: it’s just the law of averages. The question is, how regularly will it happen and what will the end cost be to your firm? Intuitively, you might guess it’s small, but the reality is quite different. Industry estimates show that one in every thousand transactions is an overpayment. There are many different reasons this can occur, but the most problematic is duplicate payments – where, by accident or dishonest design, the same invoice is paid twice. One in a thousand may not seem like too many, but it all adds up. And if you’re a business that relies on very large volumes of low-value transactions – high numbers of low-margin payments – then you could be in a lot of trouble. Recovery audit software will pinpoint where this is happening and help you get back the money paid, assuming you act soon. An accounts payable audit shows you who still owes you money that, due to oversight or problems in your accounting systems, has never been received.
The larger your business, the greater this problem is likely to be – and not just because it means a larger number of transactions to go wrong. When you are making and receiving a lot of payments, it gets harder and harder to see the incorrect ones. These could be due to genuine misunderstanding, or in the worst cases, fraud. If a supplier is raising the same invoice every month, it gets easier to send in a repeat which gets in under the radar: the source of many duplicate payments. Of course, the same thing can happen through forgetfulness or accident. Either way, you’ll end up overpaying unless someone sees it, and in a busy accounts department there’s no way that someone will be able to remember and look over all of your payments personally. That’s why recovery audit software can be so helpful, usually paying for itself the first time you use it. And problems with your accounts cut both ways. You may be overpaying other people, and your customers and others could be underpaying you. These payments can become buried in the system, with nothing in place to chase them up. An accounts payable audit searches out the offenders and ensures that they settle their bills.
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