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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Most small and medium-sized firms deal with a large range of customers, suppliers and employees. What this means is that many thousands of transactions could be processed every month, with funds 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 dig up some surprising results.
There are more than a dozen different kinds of overpayment or mistaken payment than can happen, one of the most routine of which are duplicate payments – put simply, when an invoice is paid twice. This, and other kinds 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 claw back the lost money.
It is only natural that glitches will occur with such a complicated and wide-ranging accounting system. Human error explains most of it: assuming that your payments are processed manually, your accounts department can easily process an invoice twice, or make other mistakes. This is almost unavoidable. Even if it could be fixed, you are not responsible for the invoices submitted by your suppliers. They may not be as scrupulous, and some may even be dishonest, realising that they can get errors past your accounts department that work in their favour.
This may seem like an infrequent occurrence, but the fact is that the average SME could be processing thousands of payments or more every single month. Even if a small percentage of these are false, the result is cumulative and can be huge. Remember, turnover is not the same as profit. Some estimates suggest that between 0.1 and 0.5 percent of turnover is given up due to duplicate payments and other mistakes. If your business is already struggling then this could make all the difference between sinking and swimming. That’s where the accounts payable audit comes in, finding 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 end doing business with them.
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bacs software is now a well-established tool that enables you to pay customers and suppliers quickly, securely and easily by means of electronic transfer. Bacs payments are a far better option than paying by cheque or cash, since you don’t have to worry about keeping big quantities of cash on the premises – a potential security issue – or cash-flow problems brought about by people cashing their cheques at unexpected points in your financial month. Bacs, the acronym for for bankers’ automated clearing standard, is a well-tried and tested method of payment that can save you a lot of time and money, as well as having other advantages.
Bacs usually takes three days to clear as standard, although depending on the sending and receiving banks it can be virtually instant. If you are concerned or there is cause to make a fast transfer, SWIFT (Society for Worldwide Interbank Financial Telecommunication) is guaranteed same-day. However, this means an additional cost, so for small payments it is rarely worth it. For larger sums or urgent orders and payments, SWIFT may be a good choice and the costs will be proportionately smaller if the transfer is large.
One of the great things about Bacs software is that it can be integrated with your other accounting systems and databases. If you haven’t done this, it can be a real headache and a drain on resources, because different transactions have to be logged and entered into different systems. If you take the time to set up your systems correctly, however, you can save a significant amount of time (and potentially expensive errors) and streamline your accounts in a way that is simply impossible if you are using several applications or processes.
bacs software consultants will be able to advise you on the best programmes for your accounts, and whether your present systems can be used in conjunction with Bacs payments. Migrating your accounts can be a formidable task, though the benefits are exceptional. Once you have completed the process, you can use Bacs automatically – paying workers on time, every time; ensuring that suppliers are paid and that customers are respecting their commitments to you; and logging every transaction to make sure that there are no surprises hiding in your accounts to cause problems at the end of the tax or accounting year. Moreover, auditing processes can be started to identify and fix past accounting errors – something which can cost businesses a significant proportion of turnover.
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Few have gone without feeling the strain on their finances since the recent financial crisis. Instead of simply worrying in its after effects though, some additional measures tailored specifically to managing payments may be beneficial to those wanting to avoid making losses. Indeed, it will be of especially great importance to corporations and government agencies with high levels of responsibility to others that they stay on top of their outgoings in these times of caution. They need more than ever to keep up levels of trust and respect. Happily, accounts payable audit and recovery audit software offered by companies such as Fiscal Technologies UK are designed specifically to help keep people on top of their finances. Many losses can go unseen through simple and avoidable double payments. With this in mind it makes sense to employ duplicate payments tracking technology.
Reflect upon how much easier professional life could be once your company’s payments are safely in check. Unless your business deals specifically in financial matters it is probable that employees have far better things to be concentrating on than chasing after bills and invoices, correcting here, amending there. Efficiency is key in our current climate but so is projecting a strong profile for your corporation or agency, whatever the sector it falls under. Therefore, why not allow recovery audit software to take a weight off workers’ shoulders? Then they can be left to the more strategic, communications and creative tasks.
In any scenario, the cost of doing nothing is just too great. If a company wants to be the best in its field it also needs to deliver the best right down to its payments engagements. With such high levels of attainment and expectation in mind it would be senseless to choose anything but the best in accounts payable audit technology: any initial expense such technology incurs will soon be offset by the savings almost guaranteed to be made. Altogether, duplicate payments are just too simple an error to leave uncorrected; they are not worth losing your company’s winning edge to. Putting off investment in recovery audit software is really a waste of money. Financial technologies specialists want the markets to bounce back as quickly as possible. Their investment in boosting individual business’s prospects have the safety and well-being of everybody in mind.
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