Improving Accounts Payable’s Efficiency Through Exterior Audits
It’s a reality the firms that prosper develop in complexity with time which with this complexity comes many additional areas for mistakes. It’s also a real possibility that in these difficult economic occasions, any possibility for elevated revenue or enhanced efficiency may be worth discussing. It’s for these two reasons that the recurring approach to recovering lost dollars – a recovery audit – is both necessary and practical.
Even though the primary reason for a recovery audit is to discover and recover dollars lost via duplicate payments, over payments, under deductions, accrual errors, etc., the efficiency enhancements that include an audit are simply as essential. By having an audit comes not just the moment improvement of income, but the understanding of methods to enhance processes and business practices. Probably the most useful analysis caused by an audit is asking the questions which were not requested before – Why was an overpayment made? Why did our bodies not catch that? So what can we all do to alter individuals practices? So what can our staff fare better? The solutions to those questions and also the implementation of improvement initiatives are the initial stages in enhancing efficiencies.
There are a variety of things that the recovery audit can uncover that may lead to payment errors. For many companies – especially individuals with more than $1 billion in sales – it’s a few large transaction figures. A apparently small error rate can lend itself to thousands and thousands, or perhaps millions, of dollars which are effectively missing from the conclusion. For others, payment errors could be related to numerous things – a current merger or privatization, for instance, can lead to multiple economic climates that aren’t “speaking to” each other. The way the systems are causing problems is frequently left unknown unless of course an audit is performed around the entire system.
Audit professionals will meticulously evaluate where duplicate payments and overpayments are originating from and may go a step further by suggesting solutions to those perceived problems. Audit firms can give probably the most value by charging the organization a portion from the dollars they recover.
Every clients are different with what works well with them, may it be internal audit departments, exterior audit firms or financial software, but one method to improve efficiency is to really make it an element of the conversation. Make sure that your department’s efficiency a continuing subject of debate and encourage recommendations for enhancements. There’s always room for advancement in accounts payable efficiency.
Long before you select an audit firm Singapore, take your time to evaluate their work. Find a company that specializes in accounting services, has a credible team and adheres to the norms as stated by Singapore Standard on Auditing (SSAs).