Accounts payable is the outstanding sums of money owed to and by your firm. In the course of doing business you will provide products and services to a range of parties, who will pay you for them. However, payment is not immediate; usually an accepted period of time will elapse before the invoices are fulfilled. This may be 30 days, though in some instances it can be two months or more. In other cases just 14 days is considered acceptable. An accounts payable audit explores what money is due to your company. Recovery audit software can be used to investigate the different invoices that are outstanding and work out whether they should be paid (by you), or should already have been paid by clients. One of the most important categories of overpayment for businesses is duplicate payments, which can arise either accidentally or intentionally through fraud (a company that receives a large number of invoices may not realise if a duplicate comes in, and will pay it without thinking). Whichever one, you will want to avoid these and other forms of unnecessary overpayment, whilst ensuring that those who owe you money pay it promptly.
Most businesses underestimate the financial impact that accounting problems cause. If your accounts are in order, you will be paying suppliers on time. However, others may not be treating you with equal courtesy. There will be those who pay late – perhaps consistently late, or perhaps some have never paid you for certain jobs. Then there are suppliers who have incorrectly invoiced you, or instances where human error has resulted in inaccuracies on an invoice or a copy; invoices typically have twelve fields of data on them, so this can be a common occurrence.
Researchers suggest that roughly one in a thousand transactions is an overpayment, with duplicate payments being one of the most common errors. If your business entails a big volume of transactions, you could be losing large sums of money in this way. An accounts payable audit will tell you exactly how much account errors are costing you every year. Recovery audit software will enable you to claw this back, but this is something you should pursue quickly: the more time passes, the lower the chance of reclaiming the money. Additionally, where the errors are a result of fraud, you may need to take legal action – and, at the very least, put in place measures that stop it occurring again.
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