An accounts payable audit is a way of searching your accounts records and finding out where the mistakes have occurred in the past – and, as a result, where they are likely to crop up in the future. Needless to say, errors of any sort in your accounts are a mistake you can’t afford to make – especially at the moment, in times of economic uncertainty. One of the most frequent problems is duplicate payments – paying the same individual or organisation twice for one invoice. This could be down to human error, but it can also happen more intentionally. This is another purpose of recovery audit software: to prevent fraud and regain money you have lost unnecessarily, whether through genuine mistake or through dishonest exploitation of the weaknesses in your system.
Estimates vary for the amount of money wasted by the average business on unnecessary payments, but it often comes out between 0.1 percent and 0.5 percent – that is, between one and 5 invoices per thousand. Needless to say, this can total a significant proportion of turnover. An examination of three years’ worth of accounts for many organisations can reveal discrepancies that run into three figures. The problem is that the average invoice has so many data fields that it is too easy to enter data inaccurately. In fact, auditors have found that errors of this type occur in the accounts for every single business whose accounts they have examined.
Depending on the size of your business, accounts mistakes could be costing you hundreds or thousands of pounds every month, if not more. That means that recovery audit software could net you tens of thousands of pounds back in bad payments. Even if the figure is less, it is likely to pay for itself the first time you ever use it, and continue to earn its keep in the months and years to come.
Such recovery audit software therefore promises a great return on investment and allows some peace of mind from the problems that human error always brings. Although it is probably impossible to eradicate duplicate payments altogether, an accounts payable audit will go a long way towards this goal. In an economic downturn or period of low growth, every method of saving money should be investigated. If checking your accounts can find the money you would have saved by making redundancies, then this has got to be a preferable option.
Please visit http://www.fiscaltechnologies.com/ for further information about this topic.
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