Comprehensive Accounts Payable and Recovery Audits

Recover more by expanding the scope of your AP audit. Continue to improve and validate internal controls beyond those installed specifically to manage accounts payable. Gain confidence that your business is protected from future losses while recovering money already misspent.

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Accounts payable is usually considered to be one of the high-risk items on the balance sheet because of the subjectivity inherent to the purchasing process. The large likelihood of misstatements, mistakes, or even fraud occurring in these transactions makes auditing accounts payable a priority for most businesses. To protect your business, ARI recommends an AP audit that is accompanied by a thorough review of supplier contracts and the entity’s procurement-to-payment (“P2P”) systems.

Accounts Payable Audit

Summarily, an AP audit is a historic or real-time review of a company’s transactional data to identify overpayments to suppliers and missed deductions. Without strong control procedures, anything from duplicate payments to expense fraud may be present or occurring in this area of your business.

ARI will work with your team to develop an audit plan focused on investigating the areas that expose your business to the greatest risk while also reviewing each transaction for discrepancies in:

ARI’s approach to AP auditing provides you with a significant advantage over the competition because it is both precise and comprehensive. Precise, referring to the focused review guided by an audit plan that encompasses the client’s objectives. Comprehensive, because each audit draws upon the skills of the entire team of ARI experts and incorporates additional routines to ensure none of your money is left on the table.

Contract Compliance Audits

Business is driven by partnerships and other relationships that are typically memorialized in the terms of a contract. The more complex the relationship, the more likely the underlying contract is complex. And, inaccurate or incomplete application of contract terms is another major way that companies risk losing profit.

Confidential contract review is the best way to ensure both parties are receiving the benefits promised through their contractual relationship and to reduce client-vendor friction. ARI recommends this form of audit be performed either alone or complementary to and AP audit to ensure full transparency in the client-vendor relationship(s). We understand that an audit may place pressure on these relationships and will take steps to ensure that compliance with contractual obligations does not jeopardize these relationships.

The advantage of an ARI contract audit is based on our global transaction analysis, meaning, our review of each contract’s terms is mindful of the intent of the parties. Our audit begins by reviewing each supplier contract to identify transactions that fail to meet contractual obligations. By identifying trends base on commodity, volume/number of transactions, spending category, and other variables, we can quickly uncover areas for recovery based on:

Whether performed alone or in conjuncture with a comprehensive AP audit, auditing supplier-contract compliance is an essential way to protect your business from inappropriate spending.

Procurement-to-Payment (“P2P”) Audit

The third and final aspect of a comprehensive AP audit is a review of the client’s P2P process. The large amount of transactional activity leading to the receipt and ultimate payment of an invoice is another area prone to mistakes. The complexity of this process, often spanning multiple departments, locations, and documents, results in another area of significant risk of financial exposure. ARI is capable of handling even the most intricate P2P systems because we take the time to analyze each step of the process. Beginning with the contract terms – as part of our comprehensive AP audit and contract audit review – we build an understanding of what requirements must be met during the course of the transaction. Next, we review the purchase order information and receiving documentation to confirm the results of the transaction. Finally, we compare these aspects with the invoicing and payment detail to determine whether:

the entire order process obeyed the contractual conditions;
the goods/services received match what was ordered; and
the payment amount accurately reflects the actual value of the goods/services received, as modified by contractual terms.

Each P2P review is thoroughly tailored to each client’s business but also includes the review of dozens of common problem areas, such as:

Whether performed alone or in conjuncture with a comprehensive AP audit, auditing supplier-contract compliance is an essential way to protect your business from inappropriate spending.

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Comprehensive Accounts Payable and Recovery Audits

Accounts Payable Audit

Contract Compliance Audits

Procurement-to-Payment (“P2P”) Audit

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